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Factors to Note Before John Wiley & Sons' (JW.A) Q4 Earnings

Zacks Equity Research

John Wiley & Sons, Inc. JW.A is scheduled to release fourth-quarter fiscal 2019 results on Jun 11. This provider of knowledge and knowledge-related services has underperformed the Zacks Consensus Estimate by average of 5.2% in the trailing four quarters.

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

John Wiley & Sons, Inc. Price and EPS Surprise



John Wiley & Sons, Inc. Price and EPS Surprise

John Wiley & Sons, Inc. price-eps-surprise | John Wiley & Sons, Inc. Quote

What to Expect?

The Zacks Consensus Estimate for the fourth quarter has remained stable in the past 30 days at $1.01 compared with 94 cents reported in the year-ago quarter. Further, the consensus mark for revenues is $807 million, implying growth of 1.6% from the year-ago quarter’s reported figure.

Factors Driving the Quarter

John Wiley’s performance in the quarter to be reported is likely to benefit from its focus on acquisitions and efforts to keep pace with the changing trends. Over the years, the company has acquired several publishing and distribution companies along with various online service providers. To this end, the acquisition of The Learning House is expected to contribute to John Wiley’s top line in fiscal 2019, which bodes well for the quarter under review as well. Other notable acquisitions such as Profiles International, CrossKnowledge and Atypon, among others, should also contribute to results.

Further, we commend John Wiley’s focus on metamorphosing to a more digital services-oriented company, given the declining print media stemming from the advancing technology. 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 declining revenues from print media. Also, it has shifted the online library to AtyponLiteratum 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.

Will Hurdles be Offset?

Despite the aforementioned strengths, decline in revenues at the Publishing segment is a hurdle for the company. This segment has been soft for quite some time. Also, management earlier stated that it anticipates sales in this unit to be down low-single digit for fiscal 2019. This raises concerns for the quarter to be reported as well.

Nevertheless, the company’s Solutions and Research segments have been performing well for the past few quarters and should offer respite this time as well. Markedly, the company is making escalated investments in revenue enhancement efforts, mainly in Research and Education Services. This, in fact, is expected to dent the bottom line to an extent. However, John Wiley’s efforts to realign cost structure, reinvest in particular areas with growth potential and efficiently allocate resources should help it fight cost woes.

What the Zacks Model Unveils

Our proven model doesn’t show a beat for John Wileythis earnings season. 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.

Though John Wiley carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

General Mills GIS has an Earnings ESP of +1.18% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

CarMax KMX has an Earnings ESP of +2.80% and a Zacks Rank #3.

Lovesac Company LOVE has an Earnings ESP of +11.58% and a Zacks Rank #3.

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