SAN FRANCISCO Aug 4 Chegg Inc, an Internet company that rents textbooks and provides other student services, announced a partnership with a distributor that will allow it to reduce its inventory of print books and focus on its growing digital business.
Shares of Chegg were up 16 cents at $6.05 in extended trading on Monday.
Chegg said that Ingram Content Group Inc will supply a growing portion of the college textbooks that Chegg sells to students, with Chegg taking a roughly 20 percent commission on each sale. The move will allow Chegg to save $25 million over the next six months.
Chegg will use the savings to focus on initiatives with more attractive growth and profit margin potential, Chief Executive Dan Rosensweig told Reuters in an interview ahead of the announcement.
In the second quarter, the Santa Clara, California-based company announced a net loss of $8.2 million, or 10 cents a share. Excluding certain items, Chegg said its earnings per share were breakeven. Revenue of $64.5 million was up 15 percent year-on-year.
With Chegg's school textbook rental business facing competition from Amazon.com Inc, the company has been expanding into other services aimed at high school and college students. In recent months, Chegg has acquired companies that provide students with tutoring services and coupons. (Reporting by Alexei Oreskovic; Editing by Jonathan Oatis)