Expelliarmus - Can a magical book equal magical profits?
"Harry Potter and the Deathly Hallows" was released at 12:01 a.m. Saturday morning. Most were excited to join the boy wizard for one last adventure, others were sad to see him go - including the book's publisher, the Scholastic Corporation.
The Harry Potter franchise has been a huge success worldwide and accounts for almost 30 percent of Scholastic's net profits. Fans are banking that the final book will be the most magical of all, including investors and Scholastic's C.E.O. Richard Robinson. Children have grown with Harry, but investors now question can Scholastic stock continue to grow without J.K. Rowling's creation.
"It really depends on whether or not you think they will beat the estimates that analysts have provided and the company's forward guidance," Joe Lowry, Jr. of Lowry Financial Advisors said.
Just like Harry has Voldemort, "He Who Must Not be Named," Scholastic has some numbers they would rather not name. Over the last five years, share prices have declined approximately nine percent, and after releasing their quarterly earnings report Thursday, share prices dropped over 3 percent; they announced their rise in profits was lower than expected.
"In 2006, Scholastic was still benefiting from the sixth Harry Potter book, which was still seeing strong sales at the time," Lowry explained. "This past quarter, they didn't have any major names like that. Their business is kind of a feast or famine."
Scholastic, the world's largest publisher of children's books has projected a better outcome for 2008. The corporation sold about 11 million copies of the last book in the series, "Harry Potter and the Half-Blood Prince," during its first month of release. Scholastic's initial printing of "Harry Potter and the Deathly Hallows" totals 12 million copies.
"We're going to be opened until the last customer is served, so we're here until we've served the last," Books-A-Million's Luke Schmidt promised.
According to fans, the book itself - even at the suggested retail price of $35 - is an investment worth making.
By Ted Latiak, WCJB TV20 News.
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