Printers reported that business picked up slightly in this year's third quarter, and executives said they expect to see more improvement in 2005, driven by higher demand for textbooks. But executives at Quebecor World, Banta and Donnelley all said that despite higher volume in the third quarter, pricing pressures prevented earnings from increasing. The company that has had the best performance so far this year is Courier Corp., which reported that sales and earnings in its book manufacturing segment rose in both the fourth quarter and the full year ended September 24.
Geoff Hibner, chief financial officer at Banta, said sales in its book group rose 5% in the third quarter, but profits fell due mainly to pricing pressure in the educational printing segment. Sales in the trade segment rose by double digits, Hibner added. He said that while Banta expects business to be "steady" in the fourth quarter, earnings for the book printing segment will be down for the full year because of the "difficult" pricing environment. Hibner said he is "very encouraged," however, about prospects for 2005, as the strong school adoption schedule should help relieve the pressure on prices as publishers "compete for press time."
David Boles, head of Quebecor World's North America operation, said that orders rose 3% in the quarter, but that lower prices resulted in flat sales. Quebecor saw an improvement in the adult trade market, Boles said, but mostly in the lower-priced paperback segment rather than in the hardcover category. Quebecor also had an "uptick" in educational printing, largely in the college segment, but "not as much as we would have liked," Boles reported. Still, Boles said he believes there is a "bright future" in the education segment in 2005, especially toward the end of the year.
Donnelley's third-quarter report was light on specifics, but the company said that revenue in its book group rose in the period, driven by "strengthening sales" to the education market. Much of Donnelley's quarterly report dealt with the ongoing integration of Moore Wallace, which was acquired in February. The company noted that through the first nine months of the year, it had eliminated a total of 2,995 positions, taking a restructuring charge of $75.9 million.
