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John Wiley & Sons (JW.A) Q1 Earnings: What's in Store?

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John Wiley & Sons (JW.A - Free Report) is expected to report first-quarter fiscal 2019 results on Sep 6. The company outperformed the Zacks Consensus Estimate in the trailing four quarters by an average of 13.8%. In the last reported quarter, this NJ-based retailer delivered a positive earnings surprise of 16.1%. Consequently, investors are keeping their fingers crossed and expecting that the company surpasses the earnings estimate this time as well.

How are Estimates Faring?

After registering a bottom-line increase of 14.6% in the fourth quarter of fiscal 2018, John Wiley & Sons is likely to record year-over-year decline of 15.3% in the first quarter. This is quite evident from the Zacks Consensus Estimate for the quarter under review, which is pegged at 50 cents compared with 59 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has gone up by 7 cents in the last 7 days.

The Zacks Consensus Estimate for revenues of $415 million indicates an increase of 0.9% from the year-ago quarter. If all goes well, this will be the sixth straight quarter of top-line beat. We note that total revenues of this company rose 5.6% in the last reported quarter.

Let’s delve deeper and find out the factors impacting the results.

John Wiley & Sons, Inc. Price and EPS Surprise


Factors to Consider

John Wiley & Sons covers a broad spectrum of services including education, professional development and research. Further, it offers several online services/products making it one of the names to reckon with in the publishing arena. However, with advancing technology, the print media is on the decline. To combat this trend, John Wiley & Sons is metamorphosing to a more digital services-oriented company. It has resorted to aggressive restructuring to boost margins and has laid emphasis on developing its IT infrastructure.

John Wiley & Sons is focused on building a more favorable product mix as digital services/products generate higher margins. Moving on, the company has shifted the online library to Atypon Literatum platform, which will not only accelerate its technology roadmap but will also reduce costs.  The company is also undertaking plans to realign cost structure and reinvest in areas with growth potential. These efforts are anticipated to bear fruitful results. Earlier, the company stated that it is likely to generate gross run-rate savings of about $45 million from fiscal 2019.

However, the company continues to witness soft performance at its Publishing segment and expects the same to remain a bit challenging in fiscal 2019 due to declines in print.

What Does the Zacks Model Say?

Our proven model does not conclusively show that John Wiley & Sons is likely to beat estimates this quarter. A stock needs to have both — a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

John Wiley & Sons has a Zacks Rank #2 but an Earnings ESP of 0.00%, thus making surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some better-ranked companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Costco Wholesale Corporation (COST - Free Report) has an Earnings ESP of +0.49% and a Zacks Rank #3.

Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #3.

NIKE, Inc. (NKE - Free Report) has an Earnings ESP of +3.56% and a Zacks Rank #3.

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