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John Wiley & Sons' Erudite Profits
A publisher of business, scholarly, technical and educational materials, John Wiley & Sons (NYSE:JW.A) reported solid revenue and income growth for its fiscal first quarter of 2012. Wiley's results were keyed by strong corporate sales and a leading performance from its scientific, technical, medical and scholarly division. Its ebook division also showed notable gains.
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Wiley Books Profits
GAAP net income rose to $50.8 million, or 82 cents a share, from $44 million, or 72 cents a share, in the year-ago quarter. GAAP income included deferred tax benefits. On an as-reported basis this quarter, income was 68 cents a share compared to 65 cents for Q1 of last year. Revenue rose to $430.1 million from $407.9 million, a 5% increase. Journal subscriptions and higher corporate sales drove the scientific, technical, medical and scholarly division (STMS), where revenue increased 10%. (For related reading, see How To Evaluate The Quality of EPS.)
Borders and Digital
The bankruptcy and liquidation of Borders stores held professional and trade sales down, as they only increased by less than 0.5%. Consumer sales lagged, falling 8%, also due to the Borders' closing. Ebook sales, however, continued to gain, as they rose to $11 million, triple the total from last year's Q1. The ebook sales confirm the digital trend for Wiley, as this has for other publishers.
One of Wiley's main channels, of course, is Amazon.com (Nasdaq:AMZN), which drove strong results. The company's Wiley Online Library, another of its digital initiatives, continues to show growth in usage. The number of articles accessed has increased 62% in the first full year of usage compared with the previous year. The company acknowledged the digital transformation of its business as ongoing.
The Specialized Book Trade
The book business isn't dead, and Wiley & Sons is joined in the book business and related field by some other well-known names, including McGraw-Hill Companies (NYSE:MHP). McGraw-Hill, famously known for its Standard & Poor's segment, still has a thriving publishing business going. It totaled $1.508 billion in revenue in the last quarter, a 7.2% increase. Profits increased to 68 cents a share from 61 cents in the year-ago quarter, an 11.9% rise. Its financial publishing segment was particularly strong, growing 13.5%, while its Standard & Poor's segment jumped 18.6%. The financial information field is a plum for other publishers, too. Thomson Reuters (NYSE:TRI) continues to expand its already prodigious network with its recent acquisition of yet another high-tech commodity analytic firm.
There is some change in the wind regarding educational publishing for traditional publishers such as Wiley, Pearson (NYSE:PSO) and McGraw-Hill. McGraw-Hill's results were down, and the trend toward digital and even rental or free textbooks has begun. Amazon Kindle has started an ebook text rental service. There still seems to be ample room, though, for traditional educational publishers, but as a development more than a mere hedge, Scholastic (Nasdaq:SCHL), Wiley and others have thrust themselves deeper into the digital field. Digital shows great promise for these publishers, also, not just general trade publishers.
The Bottom Line
John Wiley & Sons has shown a successful transition from a venerable old-line - even historic - publisher, into a still-vital though thoroughly modern one. It continues to expand its digital presence but has also kept its traditional product lines relevant and its distribution channels strong. It's really an underrated company and, like some of the scholarly material it publishes, a quietly intriguing stock. (For related reading, see Do e-Textbooks Help Students Save Money?)
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Wiley Books Profits
GAAP net income rose to $50.8 million, or 82 cents a share, from $44 million, or 72 cents a share, in the year-ago quarter. GAAP income included deferred tax benefits. On an as-reported basis this quarter, income was 68 cents a share compared to 65 cents for Q1 of last year. Revenue rose to $430.1 million from $407.9 million, a 5% increase. Journal subscriptions and higher corporate sales drove the scientific, technical, medical and scholarly division (STMS), where revenue increased 10%. (For related reading, see How To Evaluate The Quality of EPS.)
Borders and Digital
The bankruptcy and liquidation of Borders stores held professional and trade sales down, as they only increased by less than 0.5%. Consumer sales lagged, falling 8%, also due to the Borders' closing. Ebook sales, however, continued to gain, as they rose to $11 million, triple the total from last year's Q1. The ebook sales confirm the digital trend for Wiley, as this has for other publishers.
The Specialized Book Trade
The book business isn't dead, and Wiley & Sons is joined in the book business and related field by some other well-known names, including McGraw-Hill Companies (NYSE:MHP). McGraw-Hill, famously known for its Standard & Poor's segment, still has a thriving publishing business going. It totaled $1.508 billion in revenue in the last quarter, a 7.2% increase. Profits increased to 68 cents a share from 61 cents in the year-ago quarter, an 11.9% rise. Its financial publishing segment was particularly strong, growing 13.5%, while its Standard & Poor's segment jumped 18.6%. The financial information field is a plum for other publishers, too. Thomson Reuters (NYSE:TRI) continues to expand its already prodigious network with its recent acquisition of yet another high-tech commodity analytic firm.
There is some change in the wind regarding educational publishing for traditional publishers such as Wiley, Pearson (NYSE:PSO) and McGraw-Hill. McGraw-Hill's results were down, and the trend toward digital and even rental or free textbooks has begun. Amazon Kindle has started an ebook text rental service. There still seems to be ample room, though, for traditional educational publishers, but as a development more than a mere hedge, Scholastic (Nasdaq:SCHL), Wiley and others have thrust themselves deeper into the digital field. Digital shows great promise for these publishers, also, not just general trade publishers.
The Bottom Line
John Wiley & Sons has shown a successful transition from a venerable old-line - even historic - publisher, into a still-vital though thoroughly modern one. It continues to expand its digital presence but has also kept its traditional product lines relevant and its distribution channels strong. It's really an underrated company and, like some of the scholarly material it publishes, a quietly intriguing stock. (For related reading, see Do e-Textbooks Help Students Save Money?)
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by
Greg Sushinsky
Greg Sushinsky is a passionate independent investor, who has done his own research, analysis and investing for 20 years. One of his earliest investing memories was when he first saved and bought U.S. Savings Bonds with his own money as a small child. From there, he studied investing on his own and made small stock purchases as he grew as an investor.
Sushinsky still follows the markets, studies and reads widely in financial literature, and has written over 75 articles on investing. He is also a professional editor, whose work is published extensively in large-circulation magazines, digests and across the internet. In other pursuits, Sushinsky writes fiction and has a university degree in philosophy. To see more of Sushinsky's literary work, see http://writing.gregsushinsky.com/.
Sushinsky still follows the markets, studies and reads widely in financial literature, and has written over 75 articles on investing. He is also a professional editor, whose work is published extensively in large-circulation magazines, digests and across the internet. In other pursuits, Sushinsky writes fiction and has a university degree in philosophy. To see more of Sushinsky's literary work, see http://writing.gregsushinsky.com/.
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