* Sees FY11 EPS $1.80-$2.05 from cont ops vs est $2.22
* Sees FY11 revenue $1.90-$1.95 bln vs est $1.95 bln
* Shares down as much as 10 pct
(Recasts, adds analyst comment, conference call details)
By Siddharth Cavale
BANGALORE, Dec 16 Children's books publisher
Scholastic Corp (SCHL.O) cut its 2011 outlook due to higher
spending related to its newly launched e-commerce website,
sending its shares down as much as 10 percent.
However, the publisher of Harry Potter novels said it
expects significant longer-term gains as more customers join
the new website, which allows its book club members to order in
bulk and receive bonus points.
The company said in the second quarter, an increase in
incentives led to customers using bonus points instead of cash,
leading to a slide in club revenue.
Scholastic, which also operates school-based book clubs and
book fairs, said it expects increased online orders and fall
promotions to generate modest growth for the remainder of the
Stifel Nicolaus analyst Drew Crum said he sees low-single
digit revenue growth and a narrower loss in the next quarter.
"Two areas I would focus on: can they keep education
publishing at a level similar to last year and ...what happens
with clubs," he said.
Educational publishing revenue fell 21 percent in the
second quarter, compared with an increase of 18 percent last
year, due to lower sales of educational technology products.
The book club segment accounted for a fifth of the
company's revenue in the quarter, but remained relatively flat
compared with last year.
For September-November, Scholastic earned $74.9 million, or
$2.14 per share, compared with $55.5 million, or $1.51 per
share, a year ago.
Revenue rose 2 percent to $675.7 million, but fell short of
analysts' expectations of $684 million.
The company sees 2011 earnings of $1.80-$2.05 per share, on
revenue of $1.90-$1.95 billion.
Analysts on average expected earnings of $2.22 per share,
on revenue of $1.95 billion, according to Thomson Reuters
In September, the company had reiterated its 2011 earnings
view of $1.95-$2.20 per share, on revenue of $1.90-$2.0
The New York-based company increased its quarterly dividend
33 percent to 10 cents.
Scholastic shares, which have gained 18 percent over the
last six months, closed down 9 percent at $27.20 on Thursday on
Nasdaq. They touched a low of $26.92 earlier in the session.
(Reporting by Siddharth Cavale in Bangalore; Editing by