Acquisitions and internal growth in John Wiley's international operations helped drive sales and earnings gains for the company in the third quarter ended January 31, as the publisher's domestic operations dealt with sluggish markets. Total revenue at Wiley rose 6.4%, to $221.2 million, and net income increased 13.1%, to $24.2 million, in the period.
Revenue in its U.S. professional/trade segment rose 3%, to $81.8 million, and operating profit increased 15%, to $24.2 million. The company reported that after disappointing sales in November and December, sales "rebounded nicely" in January. Wiley's business publishing line did well in the quarter in a soft market, while the company's consumer lines were led by its cooking, reference and travel titles. Wiley continues to combat weakness in the computer book market with solid sales of Dummies titles. The company's professional and academic programs in architecture, culinary/hospitality, psychology and teacher education had a solid quarter.
Sales in Wiley's higher education segment increased 4%, to $43.6 million, but operating profit fell 8%, to $15.3 million. While Wiley's life science titles sold well, engineering sales, which account for about 20% of the division's revenue, continue to be hurt by lower enrollments in the U.S. Wiley president Will Pesce said the company remains committed to the engineering field, but said the publisher "will cut back a bit on titles."
In Wiley's U.S. STM group, sales rose 2%, to $39.7 million, and the operating profit increased 7%, to $17.2 million. Growth was attributed to new and renewed InterScience licenses and journal subscriptions and was partially offset by sluggish book sales. Pesce noted that journals account for 75% of Wiley's global STM business, and their sales have been growing at a faster pace than books for the last three years. He said he would like to see better top-line growth in the book segment. During the quarter, the STM unit felt the first effects of the bankruptcy of the subscription agent Rowecom Inc. The company estimated that Rowecom's bankruptcy will reduce revenue by less than $3 million in calendar 2003, with most of the impact hitting in fiscal 2004, which begins May 1.
In its international markets, sales in Europe were up 20% due to the April 2002 purchases of GIT Verlag and A&M Publishing plus higher sales of journals and professional/trade titles. Sales in Wiley's other international operations—Asia, Australia and Canada—rose 32%.
For the first nine months of the year, total revenue was up 19%, to $650.6 million, while net income increased 34%, to $79 million, a gain that includes several extraordinary items.