John Wiley & Sons Inc. JW.A is scheduled to report second-quarter fiscal 2016 financial numbers on Dec 8, 2015. The big question facing investors is, whether this publishing company will be able to continue with its positive earnings surprise streak in the quarter to be reported.
In the first quarter of fiscal 2016, the company delivered a positive earnings surprise of 18.4%. Notably, the company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings surprise of 6.7%. Here’s a discussion on the determinants of the second-quarter results:
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that John Wiley & Sons is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. John Wiley & Sons has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 81 cents.
The company carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Influencing This Quarter
Declining print book demand and a strengthening U.S. dollar may hurt the company’s performance in the quarter to be reported. In first-quarter fiscal 2016, revenue from print book fell 9%. Moreover, management had earlier cautioned that the overall book market will continue to be under pressure in the near future. To battle this decline, management is overhauling its books portfolio to focus on higher value content and optimize expenses accordingly.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
CarMax Inc. KMX has an Earnings ESP of +1.45% and a Zacks Rank #2 (Buy).
Toll Brothers Inc. TOL has an Earnings ESP of +3.61% and a Zacks Rank #3 (Hold).
AutoZone, Inc. AZO has an Earnings ESP of +0.73% and a Zacks Rank #3.
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