Reed Elsevier: Cost Cutting + Digital = 10% EPS Growth

Some incremental digital revenue (and major cost cutting) will allow Reed Elsevier to meet its target of 10% growth in adjusted earnings in 2007, the company said today. London-listed Reed Elsevier, a business publishing conglomerate, owns LexisNexis, Variety and Broadcasting & Cable, and the Elsevier science and medical publishing unit.

The company acknowledged it is continuing to see a decline in print advertising, but said a combination of “rapid growth in online sales” and healthy exhibitions are offsetting the decline (no news there: If digital were actually more than offsetting the print losses, that would be news). Reed is also dealing with the print-to-digital transition the way other print publishers are: by frantically cutting costs. 

Lastly, Reed will bribe shareholders through the $4 billion sale of the Harcourt educational division: proceeds will be given to shareholders by way of a special dividend.

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