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John Wiley & Sons Q4 Profit Down 84%, Sees 2014 Earnings Below View

Publishing company John Wiley & Sons Inc. (JW-A,JW-B) on Tuesday reported an 84 percent plunge in profit for the fourth quarter, reflecting lower revenues as well as restructuring and impairment charges. Looking ahead, the company forecast fiscal 2014 earnings below analysts' estimates. The company's shares are down almost 9 percent in the regular trading session.

The Hoboken, New Jersey-based company's fourth-quarter net income was $7.95 million or $0.13 per share, down from $48.27 million or $0.80 per share in the same quarter last year.

The latest quarter's results include restructuring and impairment charges of $39.61 million or $0.46 per share. The charge included accrued redundancy costs; U.S. defined benefit pension plan termination costs; process reengineering consulting costs and the write off of certain publishing and technology assets.

Adjusted net income for the quarter was $42.52 million or $0.71 per share, compared to $46.72 million or $0.77 per share in the same period last year. On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.80 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter declined 2 percent to $445.85 million from $454.58 million in the prior-year period. Two analysts had a consensus revenue estimate for the quarter of $467.35 million.

For fiscal 2013, John Wiley's net income declined to $144.23 million or $2.39 per share from $212.75 million or $3.47 per share in the prior year. Adjusted net income was $175.57 million or $2.92 per share, compared to $191.44 million or $3.12 per share last year. Revenue for the year decreased 1 percent to $1.76 billion from $1.78 billion in the previous year.

Analysts expected the company to report earnings of $3.01 per share for the year on revenues of $1.77 billion.

Looking ahead, John Wiley said that fiscal year 2014 will be a transitional year. The company noted that significant earnings benefits coming from the restructuring, Deltak, and newly-developed businesses will not be fully realized until fiscal 2015.

The company forecasts fiscal 2014 adjusted earnings per share in a range of $2.85 to $2.95. The company also projects low single-digit revenue growth, excluding divested consumer publishing programs. Analysts expect the company to earn $3.22 per share for the year on revenues of $1.80 billion.

John Wiley said it is on track to realize about $80 million in cost savings on a run-rate basis by the end of April 2014.

Further ahead, the company said it expects a significant lift in fiscal 2015 earnings from savings resulting from the completion of the restructuring initiative, contributions from acquired business and new digital products and services.

Stephen Smith, President and CEO of John Wiley said, "Going forward, we expect the downward trajectory of core-business earnings to moderate as print-related efficiencies take effect. At the same time we expect to see significant earnings contributions coming from new digital products and services and acquisitions."

In Tuesday's trading session, JW-A is trading at $37.73, down $3.72 or 8.97 percent on a volume of 316,752 shares.

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