Equifax Beats on Q3 Earnings - Analyst Blog
25 Outubro 2013 - 4:00PM
Zacks
Equifax Inc. (EFX) reported third-quarter 2013
adjusted earnings per share (adjusted for adjusted for
acquisition-related amortization expense) from continuing
operations of 90 cents, beating the Zacks Consensus Estimate of 88
cents. Results were up 21.0% from the year-ago quarter.
Revenues
Although revenues increased 10.0% year over year to $572 million
it failed to beat the Zacks Consensus Estimate of $574 million. The
year-over-year revenues were positively impacted by broad based
revenue growth across its business segments.
Segment wise, total U.S. Consumer Information Solutions (USCIS)
revenues increased 15% on a year-over-year basis to $253.1 million.
Among sub-segments, strong growth was recorded in Mortgage
Solutions Services (up 15%), followed by the Consumer Financial
Marketing Services segment (up 23%) and Online Consumer Information
Solutions (up 14%).
International revenues (including Europe, Canada and Latin
America) grew 6% year over year to $128.5 million, primarily due to
12% growth in the Europe segment, 1% in the Canada Consumer
segment, followed by 5.0% growth in the Latin America segment.
Revenues from the Workforce Solutions segment increased 3% year
over year to $115 million. The upside resulted from an 8%
year-over-year increase in Employer Services revenues while
revenues from Verification Services remained flat.
North American Personal Solutions contributed $52.3 million to
revenues, reflecting a 14% year-over-year improvement. North
American Commercial Solutions generated $23.1 million, up 9% from
the year-ago quarter.
Operating Results
Operating margin was 27.6% as against 25.1% a year ago. Margin
performance was better in the Workforce solution, USCIS and
International, which more than offset the margin declines from
North America Personal Solution and North America Commercial
Solution segments.
The company reported higher operating expenses with selling,
general and administrative expenditure increasing 7.4% year over
year.
Equifax reported net income (excluding the impact of
acquisition-related amortization expense, net of tax and cash
income tax benefit of acquisition-related amortization expense of
certain acquired intangibles) of $111.6 million or 90 cents per
share compared with $90.8 million or 74 cents reported in the
year-ago quarter.
Balance Sheet
Equifax exited the quarter with $131.9 million in cash and cash
equivalents, up from $104.9 million in the previous quarter. Total
long-term debt remained flat at $1.43 billion sequentially. The
company repurchased stocks worth $11.9 million during the
quarter.
Guidance
Considering the recent domestic and international business
activities, current foreign exchange rates and the expected
slowdown in mortgage activities, the company expects consolidated
revenues for fiscal 2013 at the mid-point of 10.0%–12.0%
year-over-year range. Adjusted earnings per share are expected to
grow in the range of 21%–24% from the year-ago quarter.
Our Take
Equifax reported mixed third-quarter results. While Equifax’s
bottom line beat the Zacks Consensus Estimate, its top line fell
short of the same. Nonetheless, the company’s revenues increased on
a year-over-year basis aided by strong growth across its business
segments.
Management’s efforts such as strategic initiatives for product
innovation, expansion of data assets through acquisitions and
continuous share gains in North America were encouraging.
Given the company’s strong correlation to consumer and financial
markets as well as its U.S. and European exposure, we see a gradual
improvement in results. Moreover, improving mortgage environment is
a big positive for the stock. However, stiff competition from
Automatic Data Processing Inc. (ADP),
Fiserv Inc. (FISV) and Moody’s
Corp. (MCO), and uncertainty in the mortgage sector are
concerns.
Currently, Equifax has a Zacks Rank #3 (Hold).
AUTOMATIC DATA (ADP): Free Stock Analysis Report
EQUIFAX INC (EFX): Free Stock Analysis Report
FISERV INC (FISV): Free Stock Analysis Report
MOODYS CORP (MCO): Free Stock Analysis Report
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