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Scholastic Earnings Decline

TSC Staff

Scholastic's(SCHL Quote - Cramer on SCHL - Stock Picks) second-quarter earnings fell 8% from last year as weakness overseas and in children's book publishing offset higher sales.

The company earned $66.9 million, or $1.59 a share, in the quarter, compared with $72.5 million, or $1.80 a share, last year. Sales rose 2% to $696.7 million.

Analysts had been forecasting earnings of $1.79 a share on sales of $702.9 million in the latest quarter.

"The impact of hurricanes on the company, challenges in School Book Clubs and Continuities, and investments to restructure our business in the United Kingdom were all factors contributing to lower profits in the second quarter," Scholastic said.

For the current fiscal year, Scholastic expects to earn $2.30 to $2.50 a share on revenue of $2.3 billion to $2.4 billion. Analysts were forecasting net income of $2.42 a share on sales of $2.32 billion.

"Responding to the challenges we faced in the second quarter, Scholastic's management team is now implementing plans to improve performance in the second half of the year, particularly in the important fourth quarter," the company said. "We are accelerating the U.K. turnaround efforts, streamlining Club promotions, booking new fairs, introducing new Continuity programs, trimming marketing costs and reducing overhead. Notwithstanding the challenges, we believe we will attain our financial goals for the year, based on these actions and strong first-quarter performance."

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