Tuesday, John Wiley & Sons, Inc. (JWA), a provider of content and solutions through print and electronic products, reported a decline in third quarter earnings, citing unfavorable effect of foreign exchange and adverse economic conditions. The company also reaffirmed its earnings per share guidance and cut its revenue forecast for fiscal 2009.
Adjusted net income for the quarter declined 16% to $33.4 million from $39.9 million in the corresponding period last year. Adjusted earnings per share slid 15% to $0.57 from $0.67 per share in the prior-year period and came below the estimate of $0.71 projected by two analysts polled by Thomson Reuters. Analysts' estimates typically exclude special items.
The company said third quarter earnings per share grew 20% on a currency neutral basis and ascribed the increase to reduced incentive compensation accruals, lower interest expense, and prudent expense management.
Revenue slid 13% to $374.38 million from $429.4 million in the prior-year quarter. Quarterly revenue declined 2% after adjusting for an unfavorable $47 million foreign exchange impact.
Scientific, Technical, Medical and Scholarly revenues declined 13% to $202 million from $232.3 million in the prior year period. Professional/Trade revenue fell 19% to $100.4 million from $123.4 million in the prior-year quarter. Higher education revenue declined 2% to $71.9 million from $73.6 million in the same period last year.
The company attributed the decline on a currency neutral basis primarily to market conditions affecting the Professional/Trade business and processing delays in Scientific, Technical, Medical and Scholarly related to journal subscription renewals.
For the nine-month period net income decreased 12% to $103.76 million from $118.54 million in the same period last year. Net income per share declined 13% to $1.74 from $2.00 per share in the year-ago period. Adjusted net income declined 4% to $103.76 million from $99.88 million last year. Adjusted net income per share declined 3% to $1.74 from $1.69 in the same period last year.
Adjusted net income for the nine-month period ended January 31, 2008 exclude tax benefits of $18.7 million, or $0.32 per share, associated with new tax laws enacted in the United Kingdom and Germany that reduced the corporate income tax rates from 30% to 28% and from 39% to 29%, respectively.
William Pesce, President and chief executive officer said, "As anticipated earlier in the year, the unfavorable effect of foreign exchange on Wiley's revenue and earnings is significant and unprecedented. In addition, economic conditions have had an adverse effect on our Professional/Trade business, particularly in the US. While the results in Professional/Trade are disappointing, it is encouraging that we have increased market share in key publishing categories. Our global STMS and Higher Education businesses are performing well."
Looking ahead, the company reaffirmed its full-year 2009 earnings per share guidance of about 20% growth on a currency neutral basis and excluding the unusual tax benefit reported in the prior year. John Wiley cut revenue guidance from mid single digit growth to low single digit growth on a currency neutral basis, principally due to market conditions affecting its Professional/Trade business.
JW-A closed Monday's regular trading session at $27.86.
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