John Wiley & Sons, Inc. (WLY) reported Q4 EPS of $1.08, $0.11 better than the analyst estimate of $0.97. Revenue for the quarter came in at $546 million versus the consensus estimate of $558.6 million.
FISCAL YEAR 2023 OUTLOOK:
- Revenue: The Company anticipates mid-single digit revenue growth at constant currency driven by Research and Education Services.
- Earnings: Wiley expects gains from revenue growth to be offset by wage inflation and growth investments in Research and Corporate Talent Development. Adjusted EPS performance is expected to be adversely impacted by 35-cents of non-operational items such as higher interest expense, higher tax expense, and lower pension income. Wiley’s adjusted effective tax rate is expected to be 22-23% in Fiscal 2023, up from 20% in Fiscal 2022. This is primarily due to an anticipated less favorable mix of earnings by country and an increase in the UK statutory rate. Fiscal 2022 also benefitted from certain non-recurring tax benefits.
- Free Cash Flow: Wiley expects positive cash earnings and lower incentive payouts for Fiscal 2022 performance compared to prior year to be offset by higher cash taxes, interest and capex ($115 to $125 million vs. $116 million in Fiscal 2022).
- Foreign Exchange Impact: With Wiley generating 47% of its revenue from outside the US, the Company’s reported results are adversely impacted by a strengthening US dollar, particularly in relation to the Euro and the British pound. Given volatility in exchange rates, there is now a material FX impact to our Fiscal 2023 outlook relative to our outlook at constant currency.