Scholastic ( SCHL), a publisher and distributor of children's books, said Thursday fourth quarter earnings fell 10.9% from the year-ago period, hurt by higher operating costs and low revenue at school book clubs. The New York-based company earned $38.4 million, or 91 cents a share, in the quarter, compared with $43.1 million, or $1.03 a share, a year ago. Fourth-quarter results include charges of 7 cents a share for a writedown in Scholastic's educational publishing segment and the bankruptcy of a customer in that segment. Analysts surveyed by Thomson First Call were expecting earnings of $1 a share. Fourth-quarter revenue rose 1.5% from a year ago to $601 million. Analysts were expecting revenue of $608.3 million in the most recent quarter. The company expects to earn $1.55 a share to $1.85 a share in the year 2007, including an after-tax stock option expense of about 5 cents a share to 8 cents a share, on revenue of $2.1 billion to $2.2 billion. Analysts were expecting earnings of $1.62 a share on revenue of $2.2 billion. Fourth-quarter operating income fell 10.1% from a year ago to $67 million and operating margin dropped 143 basis points to 11.1%.