Scholastic: Digital education
A growing digital strategy is boosting the outlook for this publisher's long-term profits.
By Charles Mizrahi, Hidden Values Alert
Scholastic Corporation (SCHL) is a global children's publishing, education and media company. Since it's founding in 1920, Scholastic has emphasized quality products and a dedication to reading and learning.
The company is the world's largest publisher and distributor of children's books and a leading developer of educational technology products. Scholastic is undoubtedly a book-publishing wizard -- evident by their exclusive publishing rights to both the Harry Potter (US) and Hunger Games (Global) series.
However, the recent move to reading on tablets and smartphones has forced the company to adapt to a changing world.
Scholastic has taken on this challenge by producing several different platforms and education technologies built to sustain future growth. Read 180, Math 180, and iRead are several of their services catering to the needs of a new generation of readers.
Scholastic's "Storia" consistently ranks among the highest of all free iPad Book Apps. Since launching it in late 2012, the app has cemented itself in the top 10.
Its expanding library consists of many popular titles of interest to all ages. By bringing books to life, SCH has made the reading experience more interactive and enjoyable.
The company's Children's Book Publishing and Distribution segment is easily the company's most successful division -- revenues topped $1 billion in revenue in 2012. However, revenue comparisons to earlier periods showed a sharp drop.
Those comparisons were bound to disappoint because they were compared to the blockbuster movie the Hunger Games -- which greatly boosted sales during that period.
Earnings also took a hit as SCHL continued to invest in eBooks and digital technology. Over time, these investments will pay off. Long-term prospects remain positive as the publishing giant continues to spread its global reach to emerging markets.
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