Scholastic Earnings: Here’s Why the Stock is Falling Now

Scholastic Corporation (NASDAQ:SCHL) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 6.26%.

Scholastic Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 61.81% to $0.76 in the quarter versus EPS of $1.99 in the year-earlier quarter.

Revenue: Decreased 25.29% to $506.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Scholastic Corporation reported adjusted EPS income of $0.76 per share. By that measure, the company missed the mean analyst estimate of $0.82. It missed the average revenue estimate of $514.3 million.

Quoting Management: “Despite the decline in U.S. and international sales of The Hunger Games, Scholastic achieved the high end of our revised guidance range for fiscal 2013 revenue and exceeded our revised earnings per diluted share and free cash flow guidance due to strong sales of our education programs in the fourth quarter,” said Richard Robinson, Chairman, President and Chief Executive Officer. “We are operating at a time of significant change in the book business and in education, and we are well-positioned to capitalize on the opportunities presented by evolving needs in the classroom and buying behavior in children’s books. With fewer retail outlets for children’s books, third-party industry research indicates that parents are increasingly relying on our Book Fairs and Book Clubs channels to find age-appropriate, quality print and ebooks for their children. Additionally, educators are looking to us for customized print and digital curriculum packages and technology-based programs and content that support their instructional needs as they implement the more rigorous Common Core State Standards – and we are meeting that demand.”

Key Stats (on next page)…

Revenue increased 33.22% from $380.5 million in the previous quarter. EPS increased to $0.76 in the quarter versus EPS of $-0.57 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a loss of $0.75 to a loss $0.76. For the current year, the average estimate has moved up from a profit of $1.01 to a profit of $1.17 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]