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John Wiley & Sons (JW.A) Q1 Earnings: What to Expect?

Zacks Equity Research
Updated

John Wiley & Sons Inc. JW.A is scheduled to report first-quarter fiscal 2016 financial numbers before the opening bell on Sep 9, 2015. The big question facing investors is whether this publishing company can continue with its positive earnings surprise streak.

In the final quarter of fiscal 2015, the company registered a positive earnings surprise of 5.2%. Notably, the company has surpassed the Zacks Consensus Estimate in all of the trailing four quarters, with an average earnings surprise of 3.1%. Here’s a discussion on the determinants of first-quarter results:

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that John Wiley & Sons is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. John Wiley & Sons has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 49 cents. The company carries a Zacks Rank #4 (Sell), which when combined with ESP of 0.00% makes a surprise prediction difficult.

Factors Influencing this Quarter

Declining print book demands and strengthening U.S dollar may hurt the company’s performance. In fiscal 2015, revenue contribution from Print books fell to 25% due to weakness in demand for printed books. Moreover, management has already cautioned that the overall book market will continue to be under pressure in the near future. To battle the decline, management is overhauling its books portfolio to focus on higher value content and optimize expenses accordingly.

Moreover, during the fourth-quarter fiscal 2015 conference call, management stated that fiscal 2016 revenues could fall by nearly $40 million and earnings per share might take a hit of 14 to 15 cents due to forex headwinds. Given these circumstances and the transitional impact of shifting to time-based journal subscription agreements, the company expects its fiscal 2016 revenue to increase in the low-single digits and earnings per share growth rate to remain flat year over year on a constant currency basis.

Stocks Poised to Beat Earnings Estimates

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

Big Lots Inc. BIG has an Earnings ESP of +100% and a Zacks Rank #3 (Hold).

Conns Inc. CONN has an Earnings ESP of +17% and a Zacks Rank #3.

hhgregg, Inc. HGG has an Earnings ESP of +7.14% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BIG LOTS INC (BIG): Free Stock Analysis Report
 
HHGREGG INC (HGG): Free Stock Analysis Report
 
CONNS INC (CONN): Free Stock Analysis Report
 
WILEY (JOHN) A (JW.A): Free Stock Analysis Report
 
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Zacks Investment Research