Earnings Outpace Sales Growth at Wiley

Total revenues rose 1% for the fiscal year ended April 30, 2001, at John Wiley & Sons, to $613.8 million, with net income ahead 12%, to $58.9 million. Unfavorable currency translations as well as a soft fourth quarter limited gains in the year, although company president Will Pesce noted that he was pleased Wiley was able to convert "a modest revenue gain into a significant earnings increase." Pesce said the second half of fiscal 2001 was disappointing, particularly in its higher education and professional/trade segments.

In its major domestic operations, STM sales increased 4%, to $156.1 million, and profits rose 12%, to $71.5 million. Higher journal renewal rates plus increased sales of enhanced access licenses to Wiley InterScience helped drive the gains. Within three years, Wiley, which has all of its journals online, expects the majority of its STM revenues to come from licensing fees generated by online content.

Revenues in the higher education segment rose 3%, to $133.1 million, with its profit contribution up 11%, to $41.9 million. The bankruptcy of Wallace's and problems at online college e-retailers limited sales gains in the year, Pesce said. Approximately 80% of the segment's revenues came from print and electronic packages.

Professional/trade revenues were flat with fiscal 2000, at $162.1 million, and profits dropped 11%, to $33.5 million. Revenues were hurt by the sale of Chapters, which disrupted trade sales in Canada; by softness at some other retailers; and by tighter inventory management by wholesalers. Online sales offset some of the weakness at bricks-and-mortar stores, rising by double digits in the year.

Pesce said he is "cautiously optimistic" about fiscal 2002, predicting that revenues will grow at a high single-digit pace, with earnings per share increasing slightly faster than sales. Pesce said market conditions have improved over the last month with higher orders and lower returns.