Reading Between The Lines Of John Wiley & Sons' Latest Earnings

| About: John Wiley (JW.A)
I am impressed with John Wiley & Sons' FY12 first quarter results (full conference call transcript here).
Revenue in the Scientific, Technical, Medical and Scholarly unit (STMS) increased to $252,715 last year, compared to $229,399 in the same quarter last year – a decent 10.16% growth. The revenue in the corporate sales sector also saw an increment of $447,000, on the same quarter last year. Just that, the higher education (HE) segment is recorded at $77,009 last quarter, compared to $78,641 the same quarter last year. But if we look at the FY11 annual report, we can clearly see that the total annual revenue in the HE segment stands at $306.5 million, up from $282.4 million in FY10.
Comparing with others in the industry, its net profit margin of 9.86% seems to be on par with Meredith's 9.4% and Pearson PLC's 9.25%. Even the operating margin of 14.24% is much better than Scholastic's 5.28% and Educational Development Corp's 6.4%, and pretty much in par with the rest in the industry.
The company is also focusing on technology services, which probably focuses around their digital presence, and it shows in the increasing services expenditure in that segment. Whether you consider the increasing participation of the digital content in the total revenue and segmented revenue sections, or what the market outlook seems to say, if the company focuses on digital content more, it might help ramp up the revenue over time.
Moreover, acquired publishing rights, worth $174.3 million this year, is also going to provide traction to the top-line of the company. All in all, I would say, John Wiley & Sons seems to be a good buy, keeping the long term in mind.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Tagged: , Publishing - Books, Earnings
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