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Last Update: 21-Mar-13 10:45 ET
Scholastic Corp Down 14% Following Earnings/Guidance Results
Scholastic (SCHL $26.75 -4.32) reported third quarter earnings of $0.63 per share, includes one-time expenses of $0.06, may not be comparable to the single estimate of ($0.39); revenues fell 18.5% year/year to $380.5 mln vs the $384.2 mln single estimate.
The decline in net income was largely the result of lower revenues, especially from lower Hunger Games sales, as well as the Company's planned increase in investments in digital initiatives, partially offset by cost-cutting measures implemented during the quarter. The third quarter is a seasonally lower revenue quarter for Scholastic and typically generates a net loss.
The company lowered guidance for FY13, sees EPS of $1.10-1.30, prior $1.40-1.60, vs. $1.52 single estimate; sees FY13 revs of $1.75-1.8 bln vs. $1.84 bln Capital IQ Consensus Estimate. The company now expects free cash flow in the range of $45 million to $55 million, compared to its previous outlook for free cash flow in the range of $100 million to $120 million.
The Company is revising its free cash flow outlook based on lower net income, the aforementioned delays in purchases of educational products in this fiscal year, the impact of the one-time payments of ~$15 million associated with state sales tax liabilities accrued in fiscal 2012, and a higher level of pre-publication expenses due to accelerated investments in new educational products.
The decline in net income was largely the result of lower revenues, especially from lower Hunger Games sales, as well as the Company's planned increase in investments in digital initiatives, partially offset by cost-cutting measures implemented during the quarter. The third quarter is a seasonally lower revenue quarter for Scholastic and typically generates a net loss.
The company lowered guidance for FY13, sees EPS of $1.10-1.30, prior $1.40-1.60, vs. $1.52 single estimate; sees FY13 revs of $1.75-1.8 bln vs. $1.84 bln Capital IQ Consensus Estimate. The company now expects free cash flow in the range of $45 million to $55 million, compared to its previous outlook for free cash flow in the range of $100 million to $120 million.
The Company is revising its free cash flow outlook based on lower net income, the aforementioned delays in purchases of educational products in this fiscal year, the impact of the one-time payments of ~$15 million associated with state sales tax liabilities accrued in fiscal 2012, and a higher level of pre-publication expenses due to accelerated investments in new educational products.
