Publishing giants the Thomson Corp. and Reed Elsevier weighed in recently with six-month results that reflect sluggish growth in several industry sectors. Thomson reported that total revenue for the first half of the year rose 1%, to $3.36 billion, although earnings from continuing operations rose 291%, to $145 million. At Reed, revenue fell 5%, to 3.42 billion euros ($3.0 billion), and adjusted operating profits fell 11%, to 724 million euros ($637 million).

At Reed's Harcourt Education subsidiary, total revenue in the first six months fell 22%, to 565 million euros, as sales in the U.S. schools and testing group fell to 469 million euros from 615 million euros, and international sales dropped to 96 million euros from 108 million euros. Sales in the U.S. k—12 market were flat, but testing sales plunged largely due to the loss of the California state testing contract. In the k—12 market, backlist sales and sales to open territories were up in both the elementary and secondary businesses, but sales from elementary school state adoptions and from supplementary materials were down. In the international segment, strong growth in academic publishing and global library business was offset by a "marked" reduction in the U.K. primary school business.

Reed said its U.S. education business is well positioned to have a "relatively" strong performance in the second half of the year, but noted that the school market continues to face "significant pressures." In addition to state budget problems, Reed said it doesn't expect new federal funds to have an impact on textbook budgets this year. As a result, Reed is forecasting industry school sales to be flat or slightly down compared to 2003, and said that while the company hopes to outperform industry growth, "this is somewhat of a challenge given comparisons against a period of significant out-performance" by the group last year.

Total sales at Reed's Elsevier science and medical division fell to 943 million euros from 1.00 billion euros in the first half of 2002. Revenue in the science and technology division fell 6.3%, to 566 million euros, while sales in health science declined 5.5%, to 377 million euros.

The science and technology division had strong subscription renewals and growing online sales. The move to electronic-only contracts continues to accelerate and while generating lower revenue than combined print and electronic sales, "has a positive impact on operational efficiency," Reed said. The company expects the trends in the first half of the year to carry over into the final six months of 2003. In health sciences, sales were up in the medical journals program and Web services and in backlist book sales. Sales of medical books are expected to accelerate in the second half of 2003.

At LexisNexis, total sales fell to 939 million euros from 1.08 billion euros in the first half of 2002. North American sales dropped 19%, to 721 million euros, while international sales were virtually flat at 219 million euros. In the U.S. legal market, revenue was up 3%, led by online sales to small law firms. Print and CD-ROM sales were flat.

Revenue at Reed Business Information, home to PW, fell to 977 million euros from 1.17 billion euros, with sales in the U.S. falling to 164 million euros from 184 million.

In Thomson's book-related operations, sales at Thomson Learning in the second quarter rose 2%, to $397 million and adjusted EBITDA increased 12%, to $46 million. The best performing units in the group were higher education and international as well as certain units in the Lifelong Learning business. Sales remained weak in the library reference market and for IT testing.

In Thomson's legal and regulatory group, revenue rose 5%, to $769 million, and adjusted EBITDA grew 8%, to $244 million. Sales growth was led by higher online sales at Westlaw and Checkpoint, increased sales of software and services and acquisitions, while legal printing and CD-ROM sales fell.