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.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.