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John Wiley (JW.A) Cuts FY20 View on Coronavirus Impacts

John Wiley & Sons, Inc. JW.A has issued business updates in response to the impact of the coronavirus outbreak. Management has informed that the isolation measures to curb the spread of the pandemic will considerably affect its fourth-quarter fiscal 2020 performance. Consequently, it trimmed guidance for the current fiscal year.

Declines in print book sales due to closure of retail bookstores and businesses depending on in-person engagement are likely to show on results. Moreover, delays in customer payments and closing of annual journal subscription agreements across some parts of Europe and Asia remain deterrents.

Management now projects revenues in the range of $1,805-$1,825 million for fiscal 2020, down from the previous projection of $1,855-$1,885 million issued at its third-quarter earnings call. Moreover, adjusted EBITDA is now guided in band of $325-$350 million compared with the prior estimation of $357-$372 million. Adjusted EPS is envisioned at $2.15-$2.30, lower from the earlier guided range of $2.45-$2.55. It also withdrew free cash flow outlook, which was at the range of $210-$230 million for the fiscal year. The pandemic is expected to mar revenues, adjusted EBITDA and adjusted EPS to the tune of roughly $50 million, $25 million and 30 cents, respectively.

Also, the COVID-19 impacts have resulted in incremental adverse FX woes. This is expected to hurt revenues, adjusted EBITDA and adjusted EPS by $7 million, $2 million and 3 cents, respectively.

As of Jan 31, 2020, John Wiley had $118 million of cash and undrawn revolving credit of $700 million. Its net debt-to-EBITDA ratio was 1.8. It also had a $1.5-billion credit agreement. Further, the company has put share buybacks on hold. However, its quarterly cash dividend of 34 cents per share payable on Apr 15, 2020, is unaffected.

In addition, John Wiley is making efforts to advance knowledge through digital learning to support research and education community. Encouragingly, students and instructors can freely access digital courseware solutions, test prep solutions and more. This Zacks Rank #2 (Buy) company is also providing partner support to universities, with additional technology support. Notably, it has launched ‘Launching Online Learning’ for K-12 educators to expedite online learning. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Although the Hoboken, NJ-based company’s shares have lost 18.5% over the course of a year, they have fared better than the industry’s 20.4% fall.

All in All

Certainly, the novel coronavirus has rattled the stock market and almost disrupted economic activities worldwide. Players are resorting to store closures, limiting job hours or working remotely. Also, the increasing uncertainty surrounding the pandemic has been compelling companies to withdraw their earlier-issued outlook.

Renowned players such as L Brands LB, Under Armour UAA and Zumiez ZUMZ withdrew guidance and have been taking measures to cope up with the unprecedented downturn.

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