US Potter publisher hit by losses

Scholastic publishes Harry Potter novels in the US

The US publisher of the Harry Potter books, Scholastic, has reported a steep quarterly loss and slashed its earnings forecast for 2006.

The firm said it had been hit by rising costs from school book club promotions.

Net loss widened to $15.5m (£8.9m), in the third quarter to 28 February, from $800,000 a year earlier.

Chief executive Richard Robinson called it as a "disappointing" quarter, and the firm said full-year results would be well below expectations.

Revenue crept up to $487.7m from $480.8m, but Scholastic was affected by higher promotional expenses in its School Book Clubs, where direct mailing costs rose.