This is a partial transcript from Your World with Neil Cavuto, July 29, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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NEIL CAVUTO, HOST: Well, the McGraw-Hill Company (search), one of the largest educational book publishers, owners of BusinessWeek magazine, meeting Street expectations today. The New York-based company posting a 4-percent rise in second-quarter earnings, primarily driven by an increase in sales of financial-related services.
With us now, Terry McGraw. He’s the chairman and CEO of the McGraw- Hill Companies.
Terry, good to have you. Thanks for coming.
TERRY MCGRAW, MCGRAW-HILL CHAIRMAN & CEO: Good to see you, Neil.
CAVUTO: Financials hot. The media stuff not as hot.
MCGRAW: Right. It’s coming back. The recovery actually on the advertising side started last year. It was a lot of the geopolitical events between February and June that really put a lot of softness and put a halt to some of that recovery.
It’s on its way back. We’re starting to see advance bookings for places like BusinessWeek and some of the broadcasting properties, but...
CAVUTO: So that’s beginning to pick up.
MCGRAW: Yes. I think September, October, November, you know, we’re going to start to see very strong indicators that, you know, that’s going to be coming through.
CAVUTO: So you were kind of cautious in your guidance going forward.
MCGRAW: Well, actually, we think this environment’s getting good. I think that the second half, the numbers are going to be a lot better, the recovery’s going to get stronger, and we’re going to see now about 4- percent growth in the second half of this year...
CAVUTO: Well, if you’re right, you know, that’s good in general for the rest of the economy.
MCGRAW: ... 8-percent, 9-percent equipment spending, you know, starting to come through, and I think 4-1/2-percent growth next year, and so those numbers are pretty good.
CAVUTO: What if the market just sort of lags after a great quarter, that’s what was commensurate with your run-up, and just piddles along?
MCGRAW: Well, for our businesses, I think that’s going to be pretty good. The educational reform agenda is strong. We’ve got new federal legislation.
CAVUTO: Except in California where they don’t have the money.
MCGRAW: California actually does not have a big educational material agenda for this year and next year. Probably good on that one. But it is the largest state and it has the most students. So we have to pay good attention to that one.
But those businesses will do very well, as well with financial services.
CAVUTO: Are you bullish on this general market climate?
MCGRAW: I am, but I do have some cautions about, you know, beyond 2004. We need to see this sustained business risk issue. We need to see businesses continue to invest. And, if 2005 starts to show a slowdown, that could be another issue.
CAVUTO: Terry McGraw, thanks for juggling with all the breaking news today. Always good seeing you.
MCGRAW: Thank you, Neil.
CAVUTO: Terry McGraw. He’s the big cheese at McGraw-Hill.
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