) increased 13.5% on Jan 30, following the company's earnings
release. Acxiom reported third-quarter 2014 earnings of $15.1
million or 19 cents per share versus $14.5 million or 19 cents in
the year-ago quarter.
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Adjusted earnings per share were 25 cents in the reported
quarter, up from 19 cents in the year-ago period. The adjusted
earnings beat the Zacks Consensus Estimate of 18 cents. The
increase in earnings was driven by increase in sales.
Total revenue for third quarter 2014 came in at $278.0 million,
up 2.0% year over year. The increase in revenue was driven by
increase in sales in Marketing and Data Services and also Other
By segments, the Marketing and Data Services segment sales
improved 6.0% year over year to $207.0 million in the reported
quarter. IT Infrastructure Management Services segment revenues
were down 11.0 % to $62.0 million. Revenues from Other Services
segment were $9 million versus $8 million year over year.
Operating margin for the reported quarter dropped to 7.1% from
9.8% in the year-ago quarter. With reduced margin levels, Acxiom
intends to trim its operating costs by approximately $20 million
to $30 million within the next 6-12 months.
Marketing and Data Services operating margin was 11.0% compared
with 9.0% in the previous-year quarter. The IT Infrastructure
Management segment reported an operating margin of 10.0%, down
from 14.0% in the year-ago quarter, while the Other Services
segment's operating margin improved to approximately 6% compared
to a loss in the prior year.
Significant Quarter Developments
During the reported quarter, Acxiom and Starcom MediaVest Group
(SMG) entered into a partnership by which SMG becomes the first
agency to license Acxiom's Audience Operating System (AOS). It is
the first of its kind cloud-based platform that delivers data and
insights at marketers' fingertips for a one-to-one marketing at
scale and revolutionizes customer experiences.
Additionally, Acxiom signed seven new AOS agreements during the
quarter with customers in several key industries including
Financial Services, Insurance, Telecommunications and Retail.
Balance Sheet and Cash Flows
Acxiom ended the quarter with cash and cash equivalents of $380.9
million. Long-term debt came in at $297.7 million.
Net cash provided by operating activities aggregated $63.8
million during the reported quarter compared with $38.5 million
in the prior-year period. Operating cash flow was $195 million
for the trailing twelve-month period compared with $133 million
in the year-ago period. Free cash flow to equity stood at $103
million for the trailing twelve-month period compared with $44
million in the prior-year period.
Acxiom increased its share repurchase authorization from $200
million to $250 million. In the reported quarter, Axciom
repurchased approximately 400,000 shares for $13.8 million during
the quarter. Since Aug 2011, the company has repurchased 12.3
million shares for $193 million.
For 2014, management expects revenues to be down marginally
compared to $1.099 billion in 2013 and earnings per share to
remain at 82 cents.
Acxiom currently has a Zacks Rank #2 (Buy). Other stocks that
look equally good include
GTT Communications, Inc
Barracuda Networks, Inc
Fair Isaac Corporation
), each carrying a Zacks Rank #2 (Buy).