Dun & Bradstreet Corporation (DNB): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
D&B reported mixed third-quarter results. While earnings comprehensively beat the Zacks Consensus Estimate, revenues missed the mark. We believe that the company's outlook reflects a sluggish macroeconomic environment in its operating markets. Further, a sequential decline in revenues in the Asia-Pacific market will remain a concern in the near term. Moreover, we believe that increasing competition will hurt profitability, going forward. Nevertheless, we believe that D&B's high-margin business model, strong international growth potential, emerging market growth opportunities, strategic investments, incremental cost savings and new product pipeline will drive growth over the long term. Thus, we maintain a Neutral recommendation and set a price target of $125.00.

Overview:

Based in Short Hills, N.J., The Dun & Bradstreet Corporation (DNB) is a leading provider of commercial information that serves a diverse set of customer needs globally. The company has three core product lines Risk Management Solutions, Sales & Marketing Solutions and Internet Solutions.

Risk Management Solutions (63.0% of revenues in 2012) comprise traditional solutions (74.0% of revenues in 2012), Value-Added Risk Management solutions (20.0% of segment revenues) and Supply Management solutions (9.0% of revenues in 2012). The traditional solutions primarily include core DNBi product line, as well database reports, which are used primarily by customers for making decisions about new credit applications. Value-added Solutions generally support automated decision-making and portfolio management. Customers use Supply Management Solutions to better understand the financial risk of their supply chain.

Sales and Marketing Solutions (29.0% of revenues in 2012) comprise the company's traditional solutions, such as marketing lists, labels, education business and electronic licensing solutions (30% of segment revenues). Value-added Solutions (70.0% of segment revenues) offer data management software like Optimizer and D&B360 product platform that integrates data into third-party Customer Relationship Management (CRM) applications.

Internet Solutions (8% of revenues in 2012) primarily comprise Hoovers, which addresses online business information needs of professionals and small businesses, such as information on companies, customers, and prospects. Effective Jan 1, 2013, the company started reporting Internet Solutions as a part of Sales & Marketing Solution set.

D&B reported revenues (including revenues from divested business) of $1.66 billion in 2012. The company reports business primarily through three segments namely North America, Asia Pacific and Europe and other International Markets. The company serves banks and other credit & financial institutions, manufacturers, wholesalers, retailers, government agencies, insurance companies and telecommunication companies, as well as sales, marketing and business development professionals. None of the customers accounted for more than 10% of revenues in 2012.

D&B faces significant competition in most of its geographic markets not only from local information providers but also from the likes of Equifax, Experian, infoGROUP and Graydon.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: CRM , DNB

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