[ACCESSWIRE]
Upcoming AWS Coverage on Educational Development
LONDON, UK / ACCESSWIRE / December 23, 2016 / Active Wall St. announces its post-earnings coverage on Scholastic Corp. (NASDAQ: SCHL). The Company reported its financial results for the second quarter fiscal 2017 (Q2 FY17) on December 15, 2016. The New York-based Company's diluted earnings, excluding one times, grew on a y-o-y basis in Q2 FY17, outperforming market consensus estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Scholastic's competitors within the Publishing - Books space, Educational Development Corp. (NASDAQ: EDUC), should be set to announce its next round of earnings results in January 2017. AWS will be initiating a research report on Educational Development in following its next earnings release.
Today, AWS is promoting its earnings coverage on SCHL; touching on EDUC. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=SCHL
http://www.activewallst.com/registration-3/?symbol=EDUC
Earnings Reviewed
Scholastic's reported revenues of $623.1 million in Q2 FY17, which was $21.3 million, or 4% above $601.8 million recorded in Q2 FY16. However, revenues fell marginally short of consensus market estimates of $628.6 million. The revenue growth was led by the Company's trade channels in the US and Canada, primarily on the strength of new Harry Potter-related publishing.
The distributor of children's book recorded net income of $67.9 million, or $1.92 per diluted share in Q2 FY17, compared to $64.9 million, or $1.84 per diluted share, in the prior year's comparable quarter. Excluding one-timers, the Company's net income totaled $70.3 million, or $1.99 per diluted share, in Q2 FY17, versus $66.4 million, or $1.88 per diluted share, in the previous year's same quarter. Wall Street was expecting the Company to report net income, excluding one-timers, of $1.92 per diluted share.
Segment-wise
For the quarter ended on November 30, 2016, Children's Book Publishing and Distribution segment reported revenues of $432.5 million compared to $413.7 million in the year ago corresponding period. In Q2 FY17, the segment's trade revenues were up by 60% to $98.5 million from $61.7 million in Q2 FY16. The segment reported an operating income of $121.1 million, or 28.0% of segment revenues, in Q2 FY17 versus $110.4 million, or 26.7% of segment revenues, in the prior-year's same quarter.
Scholastic Education segment revenues for Q2 FY17 came in at $71.1 million compared to $72.4 reported in Q2 FY16. The fall in segment revenue is primarily attributed to lower sales of consumer magazines and library publishing, partially offset by higher sales of classroom books and literacy initiatives as well as professional services. Due to the lower revenues and planned increased investment in the education sales force and new marketing support, the segment's operating income declined to $8.7 million, or 12.2% of segment revenues in Q2 FY17 from $10.4 million, or 14.4% of segment revenues, in Q2 FY16.
The publisher's International segment's revenues grew 3%, y-o-y to $119.5 million in Q2 FY17 from $115.7 million in Q2 FY16. Moreover, excluding foreign exchange translation headwinds of $2.8 million, segment revenues grew 6% y-o-y. For Q2 FY17, the segment reported operating income of $16.5 million, or 13.8% of segment revenues, compared to $11.5 million, or 9.9% of segment revenues, in the year ago comparable quarter.
Cash Matters and Balance Sheet
In Q2 FY17, net cash provided by operating activities totaled $179.7 million compared to $113.7 million in Q2 FY16. The Company reported free cash flow of $164.1 million in Q2 FY17 versus $101.8 million in Q2 FY16. As on November 30, 2016, Scholastic had cash and cash equivalents balance of $442.9 million compared to $360.9 million as on November 30, 2015. Furthermore, the Company has long-term debt amounting to $7.3 million as on November 30, 2016, versus $12.0 million as on November 30, 2015.
Dividend
In a separate press release, on December 14, 2016, Scholastic's Board of Directors announced a quarterly dividend of $0.15 per share on its Class A stock and Common Stock. The dividend will be paid on March 15, 2017, to all the shareholders registered on records as of the close of business on January 31, 2017.
Outlook
Scholastic reiterated its total revenue guidance of full year FY17 and expects it to be between $1.7 billion and $1.8 billion. Excluding one timers, the Company forecasts earnings from continuing operations for FY17 to be in the range of $1.60 per diluted share to $1.70 per diluted share. Free cash flow for FY17 is anticipated to be the range of $40 million to $50 million.
Stock Performance
On Thursday, the stock closed the trading session at $47.89, falling 1.78% from its previous closing price of $48.76. A total volume of 120.14 thousand shares have exchanged hands. Scholastic's stock price rallied 25.04% in the past three months, 26.07% in the previous six months, and 26.45% in the last twelve months. Furthermore, since the start of the year, shares of the company have surged 26.22%. The stock is trading at a PE ratio of 29.47 and has a dividend yield of 1.25%.
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