Thomson Corp. is the latest large publisher to announce that it expects lower-than-forecasted sales and earnings for 2001 due to the weakening economy. Thomson said that it now estimates that revenues for the year, excluding the newly acquired Harcourt properties, will increase 10% to 13%, compared to earlier estimates of a 15% gain. EBITDA (earnings before interest, taxes, depreciation and amortization) from ongoing operations is predicted to increase between 12% and 15%, down from the previous estimate of 17%.
Thomson said that, while the shortfall will reach across all groups, the greatest impact will be at Thomson Financial, a provider of financial information to investors and other clients. At Thomson Learning, sales in the higher education group have not been affected by the economic downturn, but sales have slumped at Thomson's lifelong learning units as corporations have cut training budgets. The decline in lifelong learning revenues will also lower EBITDA margins from the Harcourt properties to between 10% and 12%. Thomson estimates that total revenues for the year from the Harcourt businesses will be about $350 million. Thomson acquired Harcourt's higher education and corporate training subsidiaries from Reed Elsevier in July (News, July 23).
Including Harcourt's results, Thomson estimates that sales will increase in the 16%—19% range, with EBITDA up 12%—15%.