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John Wiley (JW.A) Down 12% Despite Q4 Earnings & Sales Beat
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Shares of John Wiley & Sons, Inc. lost 11.5% on Jun 11, despite earnings and sales beat in fourth-quarter fiscal 2020. However, the top and bottom lines declined year over year. Further, management did not provide an outlook for fiscal 2021, as it is unable to confidently forecast the extent or duration of COVID-19 impacts on its results.
Moreover, the isolation measures with respect to the pandemic continue to hurt the company’s Research and Education businesses, including uncertainties in student enrollments, university budgets and corporate expenditure. Meanwhile, the company’s CEO and Executive Leadership Team (ELT) have agreed to take six-month base pay cuts of 30% and 15%, respectively. Also, the board of directors will slash the cash-based part of their annual retainers by similar amounts for the aforesaid period.
Q4 in Detail
John Wiley’s adjusted earnings of 66 cents per share surpassed the Zacks Consensus Estimate of 44 cents but plunged 37.1% year over year. Also, at constant currency (cc), the metric decreased 44%.
John Wiley Sons, Inc. Price, Consensus and EPS Surprise
Revenues of $474.6 million fell 3.4% year over year (down 2% at cc) but outpaced the Zacks Consensus Estimate of $454 million. Excluding acquisitions and currency impact, the metric dropped 6%. Decline in revenues at the Research Publishing & Platforms and Academic & Professional Learning divisions resulted in a year-over-year revenue decrease. This was somewhat offset by growth at the Education Services segment.
Further, the company reported adjusted operating income of $46.2 million that decreased 42% year over year. Also, adjusted EBITDA fell 23% to $92.8 million.
Segmental Details
The Research Publishing & Platforms segment consists of Research Publishing and Research Platforms businesses. In the fiscal fourth quarter, revenues fell 3% year over year (1% at cc) to $251.2 million on delays in renewing subscription agreements due to COVID-19 shutdowns, partly offset by growth in open access. Research Publishing dipped 3% while Research Platforms increased 19%. The segment’s adjusted contribution to profit declined 4% to $79.2 million.
The Academic& Professional Learning segment includes the Education Publishing and Professional Learning businesses. Revenues in the segment declined 17% on a reported basis and 16% at cc to $149.9 million due to adverse COVID-19 impacts on print books, test prep and corporate training. Adjusted contribution to profit tumbled 73% to $10.7 million in the quarter under review.
The Education Services segment revenues increased 41% on a reported basis and 42% at cc to $73.5 million. The upside was backed by gains from the mthree buyout. Also, the segment’s adjusted contribution to profit increased significantly to $4.3 million.
Other Financial Update
John Wiley ended the quarter with cash and cash equivalents of $202.5 million, long-term debt of $765.7 million and total shareholders’ equity of $933.6 million.
This Zacks Rank #3 (Hold) company generated $288.4 million of cash from operating activities in fiscal 2020. Further, it provided free cash flow (net of Product Development Spending) of nearly $173.2 million at the end of the fiscal year. For fiscal 2020, the company still anticipates free cash flow in the range of $210-$230 million.
During the fiscal fourth quarter, John Wiley bought back 325,000 shares for $12 million and paid out cash dividends of $19 million. In March, the company’s board approved a new $200-million share buyback authorization. However, management has temporarily suspended share repurchases due to COVID-19.
Price Performance
We note that the stock has lost 5.4% in the past three months compared with the industry’s decline of 3.9%.
Celsius Holdings (CELH - Free Report) , also a Zacks Rank #1 stock, has a positive earnings surprise of 76.3% for the last reported quarter.
SunOpta (STKL - Free Report) has a trailing four-quarter positive earnings surprise of 43.1% and a Zacks Rank #1.
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John Wiley (JW.A) Down 12% Despite Q4 Earnings & Sales Beat
Shares of John Wiley & Sons, Inc. lost 11.5% on Jun 11, despite earnings and sales beat in fourth-quarter fiscal 2020. However, the top and bottom lines declined year over year. Further, management did not provide an outlook for fiscal 2021, as it is unable to confidently forecast the extent or duration of COVID-19 impacts on its results.
Moreover, the isolation measures with respect to the pandemic continue to hurt the company’s Research and Education businesses, including uncertainties in student enrollments, university budgets and corporate expenditure. Meanwhile, the company’s CEO and Executive Leadership Team (ELT) have agreed to take six-month base pay cuts of 30% and 15%, respectively. Also, the board of directors will slash the cash-based part of their annual retainers by similar amounts for the aforesaid period.
Q4 in Detail
John Wiley’s adjusted earnings of 66 cents per share surpassed the Zacks Consensus Estimate of 44 cents but plunged 37.1% year over year. Also, at constant currency (cc), the metric decreased 44%.
John Wiley Sons, Inc. Price, Consensus and EPS Surprise
John Wiley Sons, Inc. price-consensus-eps-surprise-chart | John Wiley Sons, Inc. Quote
Revenues of $474.6 million fell 3.4% year over year (down 2% at cc) but outpaced the Zacks Consensus Estimate of $454 million. Excluding acquisitions and currency impact, the metric dropped 6%. Decline in revenues at the Research Publishing & Platforms and Academic & Professional Learning divisions resulted in a year-over-year revenue decrease. This was somewhat offset by growth at the Education Services segment.
Further, the company reported adjusted operating income of $46.2 million that decreased 42% year over year. Also, adjusted EBITDA fell 23% to $92.8 million.
Segmental Details
The Research Publishing & Platforms segment consists of Research Publishing and Research Platforms businesses. In the fiscal fourth quarter, revenues fell 3% year over year (1% at cc) to $251.2 million on delays in renewing subscription agreements due to COVID-19 shutdowns, partly offset by growth in open access. Research Publishing dipped 3% while Research Platforms increased 19%. The segment’s adjusted contribution to profit declined 4% to $79.2 million.
The Academic & Professional Learning segment includes the Education Publishing and Professional Learning businesses. Revenues in the segment declined 17% on a reported basis and 16% at cc to $149.9 million due to adverse COVID-19 impacts on print books, test prep and corporate training. Adjusted contribution to profit tumbled 73% to $10.7 million in the quarter under review.
The Education Services segment revenues increased 41% on a reported basis and 42% at cc to $73.5 million. The upside was backed by gains from the mthree buyout. Also, the segment’s adjusted contribution to profit increased significantly to $4.3 million.
Other Financial Update
John Wiley ended the quarter with cash and cash equivalents of $202.5 million, long-term debt of $765.7 million and total shareholders’ equity of $933.6 million.
This Zacks Rank #3 (Hold) company generated $288.4 million of cash from operating activities in fiscal 2020. Further, it provided free cash flow (net of Product Development Spending) of nearly $173.2 million at the end of the fiscal year. For fiscal 2020, the company still anticipates free cash flow in the range of $210-$230 million.
During the fiscal fourth quarter, John Wiley bought back 325,000 shares for $12 million and paid out cash dividends of $19 million. In March, the company’s board approved a new $200-million share buyback authorization. However, management has temporarily suspended share repurchases due to COVID-19.
Price Performance
We note that the stock has lost 5.4% in the past three months compared with the industry’s decline of 3.9%.
Don’t Miss These Solid Consumer Staple Bets
Hain Celestial (HAIN - Free Report) has a trailing four-quarter positive earnings surprise of 9.9% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Celsius Holdings (CELH - Free Report) , also a Zacks Rank #1 stock, has a positive earnings surprise of 76.3% for the last reported quarter.
SunOpta (STKL - Free Report) has a trailing four-quarter positive earnings surprise of 43.1% and a Zacks Rank #1.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>