This compares to profit of $43.60 million or $0.74 per share in the prior year.
Adjusted net income per share declined to $0.76 from $0.78 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.67 per share. Analysts' estimates typically exclude special items.
As previously reported in a September 26, 2016 filing, Wiley received an unfavorable final judgment from the German Federal Fiscal Court, denying Wiley's longstanding income tax appeal.
As background, the finance court denied the argument that Wiley was entitled to claim additional tax depreciation deductions over 15 years related to a fiscal year 2003 reorganization of several German subsidiaries. No further appeals are available.
As a result, the company forfeited its approximate 57 million euro deposit and incurred a predominantly non-cash income tax charge of $48 million This charge was included in the company's income tax expense for the second quarter and six month periods ending October 31, 2016.
Second quarter adjusted EPS of $0.76, up 3% on a constant currency basis. Adjusted EPS growth was mainly due to revenue performance and cost savings from restructuring initiatives, partially offset by an increase in technology spending.
The shift to time-based journal subscriptions in calendar year 2016 had no material impact on earnings growth in the second quarter.
Second quarter revenue declined 2% on a US GAAP basis to $425.6 million, or rose 2% excluding the unfavorable impact of foreign exchange ($15 million). Wall Street expected revenues of $430.3 million.
Wiley reaffirmed its fiscal year 2017 operational outlook of flat revenue and a mid-single digit decline in adjusted EPS excluding foreign exchange.
There should be the favorable impact from shifting to time-based journal subscription agreements (+$37 million in revenue and +$0.42 in EPS), and the partial year revenue contribution (approximately +$20 million) and EPS dilution (approximately -$0.15) of the Atypon and Ranku acquisitions.
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