Volatile stock to watch: JOHN WILEY & SONS -CL A Common Stock (NYSE: JW.A)

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JOHN WILEY & SONS -CL A Common Stock (NYSE: JW.A) stock fell 11.45% on June 11th, 2020 (Source: Google finance) but slightly recovered over 1.3% on 12th June, 2020 (As of 11:53 am GMT-4; Source: Google finance)

The company’s fourth quarter of FY 20 affected the revenue and EPS by $30 million to $35 million and $0.15 to $0.20 respectively. The company’s adjusted EBITDA margin for the year was 19.4%. In April, due to the pandemic the company shut down business across the US and Europe, had lowered the revenue, adjusted EBITDA and adjusted EPS guidance and had withdrew the free cash flow guidance, due to the lack of visibility around the timing of customer payments. For the full year, the company continued to see strong revenue and profit growth in the Research and Education Services segments, while Academic and Professional Learning was laid down by challenging market conditions for print books and the fourth quarter impact of COVID-19. At the end of the quarter, the company had $202 million in cash on hand. Further, the company had more than $700 million available under its undrawn revolving credit facility.

Moreover, Research Publishing & Platforms’ revenue fell by 3% as reported and 1% at constant currency due to growth in open access, which was offset by delays in renewing subscription agreements due to COVID-19 shutdowns and university disruption. Research Publishing & Platforms Adjusted EBITDA at constant currency were flat, due to higher investment in editorial resources to support increased publishing volume offset by business optimization savings. Academic & Professional Learning revenue fell by 17% as reported and 16% at constant currency mainly due to COVID-19 impact on print books (retail closures), test prep (cancelled exams), and corporate training (postponed on-site training). Academic & Professional Learning Adjusted EBITDA at constant currency fell by 49%, due to COVID-19 impact on revenue, and investments in acquisitions and other growth initiatives. However, Education Services’ revenue  rose by 41% as reported and 42% at constant currency, on the back od the three-month contribution from mthree (+$13 million) and organic growth of 16% in Online Program Management (OPM) services.

Additionally, during the quarter, the company had repurchased 325,000 shares for a total of $12 million at an average cost per share of $35.66. In March, the company had approved a new $200 million share repurchase authorization. However, due to the economic uncertainty related to COVID-19, the Company has temporarily suspended share repurchases.  The company has paid cash dividends of $19 million ($0.34 per share) during the quarter.

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