Key Factors Shaping John Wiley & Sons' (JW.A) Earnings In Q3

John Wiley & Sons, Inc. JW.A is scheduled to report third-quarter fiscal 2019 numbers on Mar 5, before the opening bell. The company’s bottom line outperformed the Zacks Consensus Estimate in the last four quarters, the average positive surprise being 1.1%. However, this research and learning company’s earnings missed the consensus mark in the preceding two quarters.

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

How are Estimates Faring?

The Zacks Consensus Estimate for third-quarter earnings is pegged at 78 cents, reflecting a decline of 10.3% from 87 cents per share reported in the year-ago quarter. We note that the consensus mark has remained stable over the past 30 days. For revenues, the consensus estimate stands at $468.6 million, up about 3% from the year-ago period.

For fiscal 2019, the Zacks Consensus Estimate for earnings is pegged at $3.02, reflecting a decline of 12% year over year. For revenues, the consensus estimate stands at $1.82 billion, marginally up 1.2% from the year-ago period.

John Wiley & Sons, Inc. Price, Consensus and EPS Surprise

Factors to Consider

John Wiley & Sons remains on track with its efforts to provide better digital products and services to professionals, researchers and educators worldwide. The company is also undertaking plans to realign cost structure, reinvest in areas with growth potential and efficiently allocate resources. These initiatives are anticipated to bear fruitful results.

These apart, the company is gaining from expansion through buyouts. Over the years, John Wiley & Sons acquired several publishing and distribution companies along with various online service providers. In this regard, the buyout of The Learning House, an education services provider, in a deal worth $200 million is worth mentioning. Backed by this transaction, the company will be able to strengthen its position in the fast-growing education services market. Also, this acquisition is expected to contribute $30 million to sales in fiscal 2019.

Meanwhile, John Wiley & Sons is metamorphosing to a more digital services-oriented company to combat the decline in print media. It has resorted to aggressive restructuring to boost margins and has laid emphasis on developing its IT infrastructure. Moreover, the company is focusing on building a more favorable product mix as digital services/products generate higher margins and are likely to offset revenue decline from print media.

At the Publishing segment, the company continues to witness decline in revenues. Management expects a low single-digit fall in revenues at this segment during fiscal 2019. Nevertheless, the Research and Solutions segments have been performing well. John Wiley & Sons expects low-single digit revenue growth at this segment during the same period. Also, total revenues are expected to be flat year over year. The company further expects adjusted earnings to fall in mid-single digit in the fiscal year due to higher investments in Research and Education Services.

What Does the Zacks Model Say?

Our proven model does not conclusively show that John Wiley & Sons is likely to beat estimates in third-quarter fiscal 2019. 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.

Though John Wiley & Sons has a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

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

Turning Point Brands, Inc. (NYSE:TPB) has an Earnings ESP of +11.11% and a Zacks Rank #2.

Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) has an Earnings ESP of +1.43% and a Zacks Rank #2.

Viacom Inc. (NASDAQ:VIAB) has an Earnings ESP of +0.18% and a Zacks Rank #2.

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