John Wiley had a "relatively strong" third quarter ended January 31, company CEO Will Pesce said in a conference call with analysts. Sales in the period increased 10%, to $242.4 million, and net income, excluding a tax benefit, rose 17%, to $28.3 million. For the first nine months of the year, sales were up 6% to $690.9 million, and earnings, excluding one-time items, increased 11%, to $75. 8 million. Pesce said that given Wiley's performance to date, he expects that the company will finish the full year with sales growth of close to 6% with earnings increasing by high single digits.
According to Pesce, a "healthy holiday season" helped lift sales in the professional/trade group 3% in the quarter, to $84.6 million. The segment's travel category did particularly well, with Pesce noting that before the quarter began, sales in the travel segment had been below last year's, but that by the end of the period sales were ahead of 2003's pace. A number of business books did well in what Wiley called a "slowly improving market." The computer book category "gained some momentum" in the quarter in what is still a "challenging" market, Wiley said.
Sales in the higher education segment rose 7%, to $46.8 million. Sales were led by programs in business, the sciences and social sciences that countered continuing weak sales in engineering and computer science. Sales of professional/trade and STM books into the higher education market were above expectations. Pesce said he expects sales for the entire college market to increase by "a little better" than 3% in 2004, with Wiley beating industry growth. He said the higher education market is in a transitional phase, shifting from purely a print format to a combination of print and electronic packages.
In the STM segment, sales increased 7%, to $42.5 million, led by journal sales. While sales of books remained soft in the quarter, sales in online reference works and e-books picked up, Wiley reported.
In Wiley's international operations, sales in Europe rose 18% (or 9% excluding gains from foreign currency translations), to $58.9 million. Sales in Europe were helped by a "rebound" in U.K. sales, Pesce said, which was led by gains in the higher education segment. Sales in Asia, Australia and Canada rose 16%, to $32.3 million, but without gains from foreign currency translations, sales were flat. Solid indigenous publishing results in Australia were offset by a disappointing holiday season for the professional/trade segment in Canada and a weak retail market in Asia.
At the end of the quarter, Wiley took over domestic distribution for four professional handbooks published by Merck. While the six-year agreement only deals with distribution, Pesce said the agreement has the potential to expand into other initiatives. Merck had been distributing the titles itself. Simon & Schuster continues to serve as Merck's distributor of trade books.
