Publishing and media company Scholastic Corp. (SCHL), Thursday reported a wider loss for the third quarter, hurt mainly by lower sales of Hunger Games trilogy. Results also reflect delays in customer purchases of educational products, as well as higher investments in digital initiatives.
Moving forward, the company slashed its outlook for fiscal year 2013, sending its shares tumbling more than 14 percent in morning trade on the Nasdaq.
New York-based Scholastic Corp. reported quarterly net loss of $20 million or $0.63 a share, compared to net loss of $10 million or $0.33 a share last year.
The third quarter is a seasonally lower revenue period for Scholastic and typically generates a net loss, the company said in a statement.
Revenues for the quarter were lower at $380.5 million, compared to $467 million a year ago.
Growth was stifled owing to lower sales of The Hunger Games trilogy, especially in the U.S., Canada and Australia, coupled with reduced book club sales. Meanwhile, the prior year benefited from robust book revenues in advance of the March 2012 film release.
"We knew that fiscal 2013 would be challenging, given the tough comparisons for The Hunger Games trilogy, our significant investments in digital initiatives, and the timing of our major new Educational Technology product launches later this calendar year," said CEO Richard Robinson.
Operating expenses for the quarter dropped to $408 million from $479 million in the prior year.
For fiscal year 2013, Scholastic Corp. now expects earnings from continuing operations of $1.10 to $1.30 a share, before the impact of items. The company earlier estimated earnings of $1.40 to $1.60 a share.
The company expects revenues of $1.75 billion to $1.8 billion for 2013, down from previous guidance of $1.8 billion to $1.9 billion.
Scholastic Corp. stock is trading at $26.57, down 14.48%, on a volume of over 1 million shares.
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