) 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.
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
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 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
The company reported higher operating expenses with selling,
general and administrative expenditure increasing 7.4% year over
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
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
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.
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
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.
), and uncertainty in the mortgage sector are concerns.
Currently, Equifax has a Zacks Rank #3 (Hold).
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