Scholastic Corp (NASDAQ: SCHL) stock rose over 10.9% in the pre market session of December 20th, 2019 (8:42 am GMT-5; Source: Google finance) after the company posted better than expected results for the second quarter of FY 20. The company has reported fiscal second-quarter net income of $71 million, as compared to $71.6 million, in the year-ago period. The company’s free cash flow fell to $87.7 million in the second quarter of fiscal 2020 versus $93.5 million a year ago. At quarter end, the company had generated $277.8 million in cash and cash equivalents compared to $358.1 million a year ago.
SCHL in the second quarter of FY 20 has reported the adjusted earnings per share of $2.06, beating the analysts’ estimates for the adjusted earnings per share of $1.77, according to analysts surveyed by FactSet. The company had reported 1 percent decline in the adjusted revenue to $597.2 million in the second quarter of FY 20, beating the analysts’ estimates for revenue of $591.2 million. The revenue declined sue to tough comps with last year’s release of Fantastic Beasts: The Crimes of Grindelwald, an original screenplay by J.K. Rowling; and the viral global sensation, The Wonky Donkey, which together accounted for about $13 million in net sales in the second quarter of fiscal year 2019. Partially offsetting this tough comp is Make Believe Ideas, the UK-based children’s book publisher that the company had acquired in the spring, which completed the acquisition of a majority interest. The company has posted the operating income in the second quarter of $105.1 million, which is a 7% increase compared to $98.2 million one year ago. The company has posted the Adjusted EBITDA of $129.3 million compared to $123.2 million in the second quarter of 2019, which is an improvement of 5%. Operating income rose 4% to $107 million, compared to $102.9 million last year, due to a higher contribution on the margin resulting from cost mitigation strategies, mainly US Clubs and Fairs channels as well as lower technology-related expenses and overhead in the current quarter
Moreover, Education segment revenues fell by 2% to $69.9 million, on the back of lower custom publishing in the segment’s national partnership program, which develops high-quality content used by corporate and other sponsors to support learning in and out of the classroom. The segment has posted the growth in its classroom book collections business and in professional services.
Scholastic has affirmed its forecast full-year 2020 revenue to be in the range of $1.67 billion to $1.7 billion, while the analysts expect revenue to be of $1.69 billion.