MCGRAW-HILL Cos, owner of the Standard & Poor's credit-ratings service, said fourth-quarter profit fell 31 percent as the company cut three percent of its workforce.

Net income dropped to US$140.6 million from US$204.8 million a year earlier, New York-based McGraw-Hill said yesterday in a statement distributed by PR Newswire.

Sales declined to US$1.57 billion, compared with the US$1.54 billion average estimate of seven analysts in a Bloomberg survey.

The elimination of 611 jobs cost US$27.3 million in the quarter, the company said on January 8. More than half the positions came from the education unit, which has worked to integrate more technology. Chief Executive Officer Terry McGraw said on December 4 that jobs might be cut because of declining issuance of home mortgage-backed securities and collateralized debt obligations.

"December was worse than anybody in the bond business ever thought it was going to be," said Ed Atorino at Benchmark Co. The New York-based analyst recommends investors buy the stock because of its low price, good prospects for education revenue and a "likely recovery" in S&P ratings growth, according to a January 9 report.

McGraw-Hill, also the owner of BusinessWeek magazine and market researcher JD Power & Associates, rose 79 cents (two percent) to US$39.71 yesterday in New York Stock Exchange composite trading. The stock has slid 41 percent in the past 12 months.