) has posted first quarter 2012 adjusted earnings per share (
) of 70 cents surpassing the Zacks Consensus Estimate of 65 cents.
Results were up 20.7% from 58 cents reported in the year-ago
quarter. The adjusted EPS excludes acquisition-related amortization
expense. Management attributed the improvement to diverse product
offerings, which expanded Equifax' scope within the market.
Revenue grew 10.6% year over year to $522.7 million. The revenue
figure came within the company's expected growth range and was
above the Zacks Consensus Estimate of $500.0 million. The upside
could be attributed to top-line growth across the board, partially
offset by lackluster performance by the International segment.
Excluding any contribution from its Brazilian operations, revenue
grew almost 15.0% year over year in the U.S. dollar terms.
Segment wise, total U.S. Consumer Information Solutions (USCIS)
revenue was $217.7 million, up 20.0% from the year-ago quarter.
Among sub-segments, strong growth was noticed in Mortgage Solutions
Services (26.0%), followed by Online Consumer Information Solutions
(24.0%). The company witnessed a relatively slower growth rate in
its Consumer Financial Marketing Services segment (2.0%).
Total International (including Europe, Canada and Latin America)
revenue slid 5.0% year over year to $121.0 million, mostly due to a
26.0% decline recognized in Latin America. However, Europe grew
15.0%, and the Canada Consumer segment climbed 5.0% in U.S. dollar
Revenue from the TALX segment increased 14.0% year over year to
$113.7 million. The upside resulted from a 37.0% year-over-year
increase in the Verification Services revenue, partially offset by
a 2.0% decline in the Employer Services revenue.
North American Personal Solutions contributed $49.5 million,
reflecting an 11.0% year-over-year improvement. North American
Commercial Solutions generated $20.8 million, up 1.0% from the
Gross margin in the first quarter was 61.5%, up from 59.4% in
the year-ago quarter. Operating margin was 24.7% as against 23.1% a
year ago. The margin performance was better in USCIS, International
and North America Commercial Solutions, partially offset by weak
performances by North America Personal Solutions and TALX.
The company reported higher operating expenses with selling,
general and administrative expenditure increasing 17.3% year over
year, partially offset by a 3.0% decline in depreciation and
On a GAAP basis, net income from continuing operations was $71.5
million or 58 cents per share versus $57.3 million or 46 cents per
share in the comparable quarter last year. Excluding the impact of
acquisition-related amortization expense (net of tax) and a tax
benefit, adjusted net income was $85.8 million or 70 cents per
share, compared with $72.1 million or 58 cents per share in the
Balance Sheet, Cash Flow & Dividend
Equifax exited the quarter with $132.7 million in cash and cash
equivalents, up from $127.7 million in the previous quarter.
Accounts receivables were $297.8 million. Total long-term debt was
$982.0 million, down from $1.01 billion in the prior quarter. Cash
provided by operating activities was $48.3 million, compared with
$149.7 million in the prior quarter.
Equifax paid a quarterly dividend of 18 cents per share totaling
For the second quarter of 2012, Equifax expects revenue to be up
12.0% to 14.0% from the year-ago quarter, based on contributions
from domestic and international businesses, the ongoing foreign
exchange rates and excluding contributions from Brazil. Excluding
the impact of acquisition-related amortization expense, Equifax
expects adjusted earnings per share to range between 70 cents and
73 cents. The Zacks Consensus Estimate for the second quarter is 68
cents, which is on the lower end of the company's guidance.
Equifax exited the quarter with flying colors, surpassing the
Zacks Consensus Estimates both on the top and bottom lines. We are
optimistic about Equifax' revenue growth prospects and improving
margins, as reflected in its guidance.
Management's efforts regarding strategic initiatives around
product innovation, broadening data assets through acquisitions and
continuous share gains in North America were encouraging. But there
is some concern relating to the operation ramp up of its Brazilian
joint venture. In February 2011, Equifax announced that the credit
reporting operation of its Brazilian subsidiary has been merged
with Boa Vista Servicos S.A., the second-largest consumer credit
bureau in Brazil.
Given the company's strong correlation to consumer and financial
markets, as well as its U.S. exposure, we see a gradual improvement
in results. But stiff competition from
Automatic Data Processing Inc.
) is a concern.
Currently, Equifax has a Zacks #3 Rank implying a short-term
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): Free Stock Analysis Report
EQUIFAX INC (
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