Scholastic Lowers 2013 Guidance; Stock Getting Pummeled (SCHL)

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Publishing company, Scholastic Corp( SCHL ) reported on Tuesday that they are lowering their 2013 estimates due to spending cuts in schools.

The New York, NY based company reported that they are expecting a $100 million decline in revenue in 2013 due to schools fearing federal spending cuts.

The company now expects EPS to be in the range of $1.40 to $1.60 per share, down from their previously estimate range of $2.20 to $2.40 per share.

SCHL expects to see revenue between $1.8 billion and $1.9 billion, down from their prior estimate of $1.9 billion to $2 billion.

The company stated that there are two major reasons why they are expecting a decline. One reason being that many schools are cutting back on books, saving money for Common Core, which is a a set of standards set for math and reading. The other reason is the schools fear of federal budget cuts, which are planned to occur automatically.

Scholastic shares were down $6.84, or -21.48% during premarket trading Wednesday.

The Bottom Line
Shares of Scholastic Corp ( SCHL ) have a 1.57% dividend yield, based on last night's closing stock price of $31.84. The stock had technical resistance around the $28 price area, but that level appears to already be broken. The next level of support appears to be around the $25-$26 levels.

Scholastic Corp( SCHL ) is not recommended at this time, holding a DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: SCHL

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