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John Wiley & Sons (JW.A) Tops Q3 Earnings, Trims Sales View
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John Wiley & Sons Inc. () posted better-than-expected earnings for the second straight quarter, when the company reported third-quarter fiscal 2017 results. However, total revenue came below expectations, after beating the same in the preceding quarter.
John Wiley & Sons reported adjusted earnings of 92 cents per share that beat the Zacks Consensus Estimate of 80 cents and also increased from 67 cents in the year-ago quarter. The company’s performance in the reported quarter was primarily driven by solid performance of Journal Revenue, Online Program Management, Corporate Learning and Online Test Preparation.
Further, the company reported revenues of $436.5 million flat year over year but missed the Zacks Consensus Estimate of $454 million.
On a constant currency (cc) basis, adjusted earnings rose 37% year over year while revenues gained 3%. Including one-time charges, the company reported earnings of 82 cents compared with a profit of 61 cents in the prior-year quarter.
Adjusted operating income came in at $60.3 million, up 13% (up 14% at cc) from the year-ago quarter. However, adjusted operating margin expanded 160 basis points to 13.8%.
Following mixed results and dismal revenues guidance, the company’s shares declined 1.2% on Mar 7. We believe the stock, which has underperformed the Zacks categorized Publishing-Books industry, with a decline of 10.4% compared with a fall of 7.5% for the latter will find it hard to make a recovery in the near term.
Segment Details
Research: The division’s adjusted revenues of $205.8 million climbed 17% year over year, fueled by a rise in Journal Revenue. The segment’s adjusted direct contribution to profit was $89.7 million that increased 15.9% from last year. After accounting for shared services and administrative expenses, the division’s adjusted contribution to profit was $53 million, up 14.2% from the prior-year quarter.
Publishing: Revenues at the division declined 13% to $171.4 million, as dismal Books and Reference Material revenue could not be mitigated by strength noted in Online Test Preparation, Course Workflow, and Licensing and Other. Adjusted direct contribution to profit by the division fell 17.8% year over year to $79.5 million. Additionally, contribution after allocating shared services and administrative, the division’s adjusted operating profit came in at $39.8 million, down 22.4% year over year.
Solutions: Revenues increased 14% year over year to $59.2 million, boosted by robust performance of Online Program Management and Corporate Learning. The division’s adjusted direct contribution to overall profit was nearly $13.5 million, down 32.1% year over year. Adjusted contribution to profit after allocating shared services and administrative expenses came in at $4.7 million in comparison with $2 million recorded in the year-ago quarter.
Other Financial Details
The company ended the quarter with cash and cash equivalents of $482.3 million and net debt of $388.4 million.
John Wiley, which shares space with Pearson plc (PSO - Free Report) , A.H. Belo Corporation and Scholastic Corporation (SCHL - Free Report) used free cash flow of $119.5 million at the end of third-quarter fiscal 2017, compared with $18.9 million in the year-ago period.
Nevertheless, the company bought back 255,200 shares for $14.1 million in the reported quarter, leaving more than 4 million shares pending under the standing authorization.
Outlook
John Wiley reiterated previously announced fiscal 2017 guidance earnings guidance. The company expects earnings to be down by mid-single digits but lowered revenues to low-single digit decline from flat on a year-over-year basis. This guidance excludes foreign exchange, the favorable impact from the shift to time-based journal subscription agreements, and impact from recent buyouts. Moreover, the impact of the shift to time-based journal subscriptions will boost revenues and earnings by nearly $37 million and 42 cents per share, respectively.
John Wiley currently carries a Zacks Rank #4 (Sell).
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John Wiley & Sons (JW.A) Tops Q3 Earnings, Trims Sales View
John Wiley & Sons Inc. () posted better-than-expected earnings for the second straight quarter, when the company reported third-quarter fiscal 2017 results. However, total revenue came below expectations, after beating the same in the preceding quarter.
John Wiley & Sons reported adjusted earnings of 92 cents per share that beat the Zacks Consensus Estimate of 80 cents and also increased from 67 cents in the year-ago quarter. The company’s performance in the reported quarter was primarily driven by solid performance of Journal Revenue, Online Program Management, Corporate Learning and Online Test Preparation.
Further, the company reported revenues of $436.5 million flat year over year but missed the Zacks Consensus Estimate of $454 million.
On a constant currency (cc) basis, adjusted earnings rose 37% year over year while revenues gained 3%. Including one-time charges, the company reported earnings of 82 cents compared with a profit of 61 cents in the prior-year quarter.
Adjusted operating income came in at $60.3 million, up 13% (up 14% at cc) from the year-ago quarter. However, adjusted operating margin expanded 160 basis points to 13.8%.
Following mixed results and dismal revenues guidance, the company’s shares declined 1.2% on Mar 7. We believe the stock, which has underperformed the Zacks categorized Publishing-Books industry, with a decline of 10.4% compared with a fall of 7.5% for the latter will find it hard to make a recovery in the near term.
Segment Details
Research: The division’s adjusted revenues of $205.8 million climbed 17% year over year, fueled by a rise in Journal Revenue. The segment’s adjusted direct contribution to profit was $89.7 million that increased 15.9% from last year. After accounting for shared services and administrative expenses, the division’s adjusted contribution to profit was $53 million, up 14.2% from the prior-year quarter.
Publishing: Revenues at the division declined 13% to $171.4 million, as dismal Books and Reference Material revenue could not be mitigated by strength noted in Online Test Preparation, Course Workflow, and Licensing and Other. Adjusted direct contribution to profit by the division fell 17.8% year over year to $79.5 million. Additionally, contribution after allocating shared services and administrative, the division’s adjusted operating profit came in at $39.8 million, down 22.4% year over year.
Solutions: Revenues increased 14% year over year to $59.2 million, boosted by robust performance of Online Program Management and Corporate Learning. The division’s adjusted direct contribution to overall profit was nearly $13.5 million, down 32.1% year over year. Adjusted contribution to profit after allocating shared services and administrative expenses came in at $4.7 million in comparison with $2 million recorded in the year-ago quarter.
Other Financial Details
The company ended the quarter with cash and cash equivalents of $482.3 million and net debt of $388.4 million.
John Wiley, which shares space with Pearson plc (PSO - Free Report) , A.H. Belo Corporation and Scholastic Corporation (SCHL - Free Report) used free cash flow of $119.5 million at the end of third-quarter fiscal 2017, compared with $18.9 million in the year-ago period.
Nevertheless, the company bought back 255,200 shares for $14.1 million in the reported quarter, leaving more than 4 million shares pending under the standing authorization.
Outlook
John Wiley reiterated previously announced fiscal 2017 guidance earnings guidance. The company expects earnings to be down by mid-single digits but lowered revenues to low-single digit decline from flat on a year-over-year basis. This guidance excludes foreign exchange, the favorable impact from the shift to time-based journal subscription agreements, and impact from recent buyouts. Moreover, the impact of the shift to time-based journal subscriptions will boost revenues and earnings by nearly $37 million and 42 cents per share, respectively.
John Wiley currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>