Scholastic Corporation

Carnival will report its third-quarter results on Tuesday before market hours, with the market expecting revenue to grow 2.4% year on year. Last quarter the cruise ship company reported revenues of $6.66 billion, up 5.3% year on year, and 25.7 million passenger cruise days, up 1.6% year on year, a mixed quarter in which it beat analysts' EPS estimates but full-year EBITDA guidance slightly missed expectations. Analysts have generally reconfirmed their estimates over the last 30 days, though Carnival has missed Wall Street's revenue estimates multiple times over the last two years. Among its consumer discretionary peers, only Scholastic has reported so far, missing revenue estimates with a 3.9% year-on-year sales decline and a 7.8% stock drop on the results. Carnival shares are down 6.7% over the last month, versus a 6.8% average decline for the group, and the stock carries an average analyst price target of $33.99 compared to a current share price of $22.29.

Costco Wholesale Corp. reported fourth-quarter fiscal 2026 adjusted earnings of $6.60 per share, beating the Zacks Consensus Estimate of $6.48 per share, sending its shares up 2.9%. Shares of People Inc. jumped 11.3% following a Wall Street Journal report that MGM Resorts International is considering acquiring the company. Akamai Technologies Inc. gained 3.2% after entering a seven-year power deal with AI giant Anthropic worth $11.6 billion. Scholastic Corp. tumbled 7.1% after posting a first-quarter fiscal 2027 adjusted loss of $3.63 per share, wider than the Zacks Consensus Estimate of a loss of $3.42 per share.

Akamai Technologies surged more than 21% in premarket trading after announcing a seven-year power contract and an $11.6 billion deal with Anthropic, alongside a warrant letting Anthropic buy up to roughly 5% of Akamai's shares at $111.33 each. Scholastic fell over 10% after posting an adjusted fiscal first-quarter loss of $3.63 per share, wider than the $2.52 per share loss a year earlier, on revenue of $216.8 million, down 4%. Synopsys gained over 3% after HSBC upgraded the stock to buy from hold, with analyst Frank Lee calling the company a high-growth AI beneficiary under its new business model. Nike slid nearly 2% after Bank of America downgraded it to underperform from neutral, expecting sales declines from the second quarter through the rest of fiscal 2027. Costco Wholesale edged lower even after reporting better-than-expected fiscal fourth-quarter results, with adjusted earnings of $6.60 per share on revenue of $95.72 billion, topping LSEG consensus estimates of $6.53 per share and $94.86 billion.

Akamai Technologies shares jumped 23% after the company announced a seven-year, $11.6B agreement with Anthropic to provide cloud infrastructure and software supporting CPU workload growth at scale, a deal that could reach $20B if certain conditions are met. As part of the agreement, Akamai granted Anthropic warrants representing about 5% of its common stock, with 2% expected to vest initially and the remaining 3% tied to an additional $9B in cloud service purchases over the seven-year term. Fathom Holdings rose 23% and Neighborhood Intelligence gained 4% after the companies agreed to explore an alternative transaction replacing their previously announced merger agreement, under which NXH would contribute its roughly 38.8% direct and indirect stake in tZERO Group, Medici-related fund assets, and its investment in GrainChain to Fathom, with the contributed digital assets valued at no less than $130M, in return for newly issued Fathom shares and an expected controlling interest in Fathom. Select Water Solutions climbed 6% after agreeing to acquire private water midstream company Pilot Water Solutions for $700M in cash and stock, plus up to $15M in contingent consideration, comprising $600M in cash and $100M in Class A shares, with debt financing commitments from JPMorgan Chase and Bank of America and an expected close in Q4 2026. Scholastic plunged 12% after reporting wider-than-expected FQ1 losses and a 4% Y/Y revenue decline driven by soft educational spending, though it reaffirmed its full-year 2027 outlook for revenue growth of 2% to 4%, adjusted EBITDA of $135M to $145M, and free cash flow of $35M to $40M. Zscaler fell 4% after appointing Ross Tackett as Chief Revenue Officer effective October 1, 2026, succeeding Mike Rich, who is stepping down for personal reasons but will remain as a strategic advisor through December 31, 2026.

Scholastic reported a quarterly loss of $3.63 per share, wider than the Zacks Consensus Estimate of a loss of $3.42 and compared with a loss of $2.52 per share a year ago, an earnings surprise of -6.14%. The publishing, education and media company posted revenues of $216.8 million for the quarter ended August 2026, missing the Zacks Consensus Estimate by 3.51% and down from year-ago revenues of $225.6 million. The company has now failed to beat consensus revenue estimates in each of the last four quarters, though it surpassed consensus EPS estimates three times over that span. Ahead of the release, the estimate revisions trend for Scholastic was favorable, translating into a Zacks Rank #2 (Buy). The current consensus EPS estimate is $3.51 on $560.81 million in revenues for the coming quarter and $1.61 on $1.63 billion in revenues for the current fiscal year.

Disney reported second-quarter revenues of $25.25 billion, up 6.8% year on year, falling short of analysts' expectations by 0.6% but beating EPS estimates. Among the seven consumer discretionary media stocks tracked, News Corp was the best performer with revenues of $2.34 billion, up 10.8% year on year and beating estimates by 4.1%, while Scholastic was the weakest with revenues of $476.1 million, down 6.3% year on year and missing estimates by 7.9%. Warner Music Group reported revenues of $1.86 billion, up 10.4% year on year and beating estimates by 3.8%, and The New York Times reported revenues of $762.5 million, up 11.2% year on year and beating estimates by 1.4%. As a group, revenues missed analysts' consensus estimates by 0.8%, and share prices have held steady on average since the latest earnings results.

Scholastic shares dropped 12.5% to $40.65 after the children's publishing and education company reported fiscal second-quarter revenue of $476.1 million, down 6.3% year-on-year and missing analyst estimates by 7.9%. The company also issued full-year EBITDA guidance that fell significantly short of expectations, making it the weakest performer against estimates among the 55 consumer discretionary stocks tracked. CEO Peter Warwick highlighted progress in a multi-year transformation and said adjusted EBITDA rose in line with guidance, positioning the company for growth in fiscal 2027. The broader consumer discretionary sector saw revenues beat consensus by 1.5% on average, though next-quarter guidance came in 2.3% below estimates and share prices declined 1.2% collectively.

StockStory identifies Paychex, Teradata, and Scholastic as cash-producing companies that investors should steer clear of despite strong free cash flow margins. Paychex, with a trailing 12-month free cash flow margin of 35.7%, faces slowing demand and rising costs that have compressed its operating margin. Teradata, posting a 39.6% free cash flow margin, struggles with subpar billings growth and expects its free cash flow margin to contract by 20.2 percentage points. Scholastic, at a 28% free cash flow margin, has posted below-sector revenue growth and weak returns on capital, limiting its ability to invest or return cash to shareholders.