Profit fall shadows McGraw education unit McGraw-Hill, owner of Standard & Poor's, has raised its guidance for the full year but saw an 11 per cent slide in third quarter education revenues as it considered whether to spin off the division or sell it to a private equity bidder. People familiar with dual-track negotiations on an education sale or spin-off said McGraw-Hill had received interest from Apollo, Bain Capital and Apax Partners, which controls Cengage, a rival, heavily indebted higher education group. Apax could find savings from combining the two companies. Several analysts had expected a decision in mid-to-late October over the future of McGraw-Hill Education, which competes in the school and higher education market with Pearson, owner of the Financial Times. Terry McGraw, chairman and chief executive, told analysts that he would have news on the plans for the education division "in the coming weeks and hopefully sooner." "Critical to this decision is ensuring that we choose the option that maximises shareholder value," he said. Operating profit at McGraw-Hill Education fell 20 per cent, or 15 per cent when costs of the group's restructuring programme are excluded. Most of the decline stemmed from weak US state and local spending on schools. Revenues in McGraw's school education group fell 16 per cent, while professional, higher education and international revenues slipped 6 per cent. About a third of the fall was because of revenues being deferred as the business moves from publishing textbooks to selling more digital subscriptions. It was unclear on Friday whether the declines would affect bidders" appetites or valuations. Mr McGraw said the education business was facing "some very tough current challenges" in the US, but the transition from print to digital products and services was "gaining momentum." The group raised its guidance, saying full-year earnings per share would be in a range of $3.35 to $3.40, rather than the $3.25 to $3.35 range it expected. McGraw-Hill Financial, the division that includes Standard & Poor's, Capital IQ and Platts, reported a 15 per cent increase in quarterly revenues and a 21 per cent jump in adjusted operating profit. Mr McGraw attributed the growth to revenue from the new S&P Dow Jones indices joint venture and strong growth in corporate bond issuance, adding that S&P's research suggested that companies" debt needs would "remain robust" for several years. The strong McGraw-Hill Financial performance helped the group to 3 per cent higher adjusted net income from continuing operations and a 10 per cent rise in adjusted diluted earnings per share. The group's shares closed down 3.7 per cent at $54.43 in New York.