) reported first-quarter 2014 adjusted earnings per share from
continuing operations of 89 cents, which came ahead of the Zacks
Consensus Estimate by a couple of cents. Earnings were up 2.3%
from the year-ago quarter.
Despite increasing 3.2% year over year, Equifax's revenues of
$584.5 million lagged the Zacks Consensus Estimate of $588
million. The year-over-year increase resulted from revenue growth
in most of its business segments.
Segment-wise, total U.S. Consumer Information Solutions
revenues were down 0.5% from the year-ago quarter to $243.9
million. Among sub-segments, growth was recorded in the Consumer
Financial Marketing Services segment (up 3%) and Online Consumer
Information Solutions (up 2%), which was offset by an 18.0%
revenue decline in the Mortgage Solutions Services.
International revenues (including Europe, Canada and Latin
America) grew 16% year over year to $143.9 million, primarily due
to 39% growth in the Europe segment which more than offset the 4%
decline in revenues from Canada Consumer segment. Revenues from
Latin America remained flat. Revenues from Europe included
revenues of Equifax's recently acquired company, TDX Group in the
Revenues from the Workforce Solutions segment fell 3% on a
year-over-year basis to $119.7 million, primarily due to a 7%
decline in revenues from Verification Services which more than
offset a 1% increase in revenues from Employer Services.
North American Personal Solutions contributed $54.1 million to
revenues, reflecting a 6% year-over-year improvement. North
American Commercial Solutions generated $22.9 million of
revenues, remained flat on a year-over-year basis. Revenues from
Forseva, Equifax's recent acquisition, were included in this
Equifax's operating margins came in at 26% compared to 26.3%
reported in the year-ago quarter, primarily due to the effect of
the acquisitions. Adjusted net income came in at $110.9 million
or 89 cents per share compared with $107.6 million or 87 cents
reported in the year-ago quarter.
Equifax exited the quarter with $101.4 million in cash and
cash equivalents, compared to $235.9 million in the previous
quarter. Total long-term debt (including current portion) stood
at $1.63 billion. During the quarter, the company paid dividends
of $30.7 million and repurchased stocks worth $24.4 million.
Considering the recent domestic and international business
activities, current foreign exchange rates and the expected
slowdown in mortgage activities in the first half of 2014,
management expects revenues from the second quarter to range
between $606 million and $619 million (mid-point $612.5 million),
while the Zacks Consensus Estimate is pegged at $614 million.
Earnings are forecasted between 92 cents and 95 cents (mid-point
93.5 cents). The Zacks Consensus Estimate is pegged at 95
Equifax reported mixed first-quarter results. While Equifax's
bottom line beat the Zacks Consensus Estimate, the top line fell
short of the same. Nonetheless, the company's revenues increased
on a year-over-year basis aided by strong growth across most its
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 could be a positive for the stock. However,
stiff competition from
Automatic Data Processing Inc.
) and uncertainty in the mortgage sector are concerns.
Currently, Equifax has a Zacks Rank #3 (Hold).
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