Reed Elsevier beats profit estimates

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London--Reed Elsevier plc, the U.K.-based publishing giant that owns Cahners Business Information, Friday reported a 17% increase in its first-half earnings and said it remains on track for double-digit profits this year.Reed said its first-half profit before taxes and exceptional items rose to $579 million, compared with $500 million in the same period last year. Analysts had expected the company to post a profit before taxes and exceptional items of $547 million to $556 million. But stripping out exceptional items, the company's profit before taxes was $259 million, down 5.2% from $273 million a year earlier. First-half revenue rose 13% to $2.9 billion, from $2.5 billion. Reed said the first-half results reflected strong performances from its science and medical, legal and education businesses, which should get more of a boost in the months ahead as international regulators just approved its $4.5 billion acquisition of science and medial publisher Harcourt General Inc. Reed's b-to-b division posted a 3% gain in operating profit and 8% increase in revenue. Its growth was held back by the slowdown in U.S. advertising markets. The slump is expected to have a "broader and deeper impact" on the business unit in the second half of the year, the company said, although cost cuts already implemented, including a work force reduction and cutbacks in development spending, will mitigate the effects. Reed is searching for a new Cahners CEO following Marc Teren's abrupt departure in July.

--Matthew Schwartz

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