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Factors Influencing John Wiley & Sons' (JW.A) Q1 Earnings

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John Wiley & Sons, Inc. (JW.A - Free Report) is scheduled to release first-quarter fiscal 2020 results on Sep 5. The bottom line of this provider of knowledge and knowledge-related services has underperformed the Zacks Consensus Estimate by average of 8.2% in the trailing four quarters. However, in the last reported quarter, the company reported a positive earnings surprise of 4%.

Let’s see what’s in store for the company this time around.

What to Expect?

The Zacks Consensus Estimate for earnings in the first quarter is pegged at 25 cents, indicating a decline of 41.9% from 43 cents reported in the year-ago quarter. We note that the metric has gone down by a penny in the past seven days. Further, the consensus mark for revenues is $422.7 million, suggesting an increase of 2.9% from the year-ago quarter’s reported figure.

John Wiley & Sons, Inc. Price and EPS Surprise

Factors to Consider

John Wiley is optimistic about its top-line growth. In this regard, the company’s Test Preparation and CrossKnowledge businesses got back on track during fiscal 2019, with the Professional Assessment business performing well. Further, the multi-year business optimization program is enabling the company to achieve significant cost savings and improve efficiency within the organization. Keeping in these lines, management anticipates savings to be roughly $100 million over the next three years, most of which will be reinvested to drive the top line. In doing so, the company expects to report a restructuring charge for the fiscal first quarter. This along with additional investments made to improve the Research and Education Services segment may have negatively impacted the bottom line in the to-be-reported quarter.

Moreover, the Publishing business is expected to reflect a drab performance in the upcoming quarterly results. However, robust sales performance in Research Subscriptions and Open Access in Atypon; Education Services including Learning House and Professional Assessment bode well. The Subscription business remains steady, with rapid growth in Open Access. In fact, the unit is witnessing healthy demand for new researcher services and corporate products, including advertising and databases.

John Wiley has been making efforts to transform into a more digital services-oriented company, given the declining print media. Evidently, the company is focusing on building a more favorable product mix, as digital services/products generate higher margins and are likely to offset the decline in print media. Also, it has shifted the online library to the Atypon Literatum platform, which will not only accelerate its technology roadmap but also lower costs. Such efforts have been boosting John Wiley’s revenues from digital sources and are tailwinds for the impending quarter.

What the Zacks Model Unveils

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

John Wiley carries a Zacks Rank #3 and an Earnings ESP of 0.00%, which makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may consider, as our model shows that these have the right combination of elements to post an earnings beat.

Zumiez (ZUMZ - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

General Mills (GIS - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #2.

Costco (COST - Free Report) has an Earnings ESP of +0.62% and a Zacks Rank #3.

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