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Acxiom (ACXM) Misses Q3 Earnings, Revenues Down Y/Y - Analyst Blog

Acxiom Corporation ( ACXM ) reported lackluster third-quarter fiscal 2015 results with GAAP earnings of $4.2 million or 5 cents per share, down from $15.1 million or 20 cents per share in the year-ago period. The year-over-year decrease in earnings was primarily due to the relatively poor performance of the IT Infrastructure Management business and other expenses.

The company reported adjusted earnings of 23 cents per share versus 27 cents in the year-ago quarter. The recurring earnings (with stock-based compensation adjustments) were 16 cents per share missing the Zacks Consensus Estimate of 24 cents.

Acxiom Corporation - Earnings Surprise | FindTheBest

Revenues

Total revenue for third-quarter fiscal 2015 came in at $260.4 million, down 3.1% year over year due to a decline in IT Infrastructure Management revenues. Revenues for the reported quarter well exceeded the Zacks Consensus Estimate of $254 million.

By segments, sales from the Marketing and Data Services segment increased 1% year over year to $208.2 million. IT Infrastructure Management Services segment revenues were down 16% to $52.2 million.

Operating income for the reported quarter declined to $5.2 million from $19.3 million in the prior-year quarter due to expenses associated with business separation and transformation activities, non-cash compensation, acquired intangible asset amortization, and lower IT Infrastructure Management revenue.

Significant Developments in the Quarter

Acxiom signed 25 new Audience Operating Systems (AOS) and Live Ramp agreements during the quarter, bringing its client roster tally to approximately 195 at quarter end. On a combined basis, AOS and LiveRamp revenue was $21 million in the reported quarter. Gross media spend enabled by the AOS platform was $73 million, up 265% from the year-ago period.

LiveRamp also expanded its strategic partnership with Datalogix, which runs through the end of 2017.

During the quarter, Acxiom inked several marketing and data services agreements as well as renewals with a major telecommunications company and a leading insurance firm.

Balance Sheet and Cash Flow

Acxiom ended the quarter with cash and cash equivalents of $126.9 million and long-term debt of $262.8 million.

Net cash provided by operating activities aggregated $42.7 million during the quarter compared with $63.8 million in the prior-year period. Free cash flow to equity stood at $1 million for the trailing 12-month period compared with $103 million in the prior-year period due to changes in working capital, cash restructuring and other business expenditure.

During the reported quarter, Acxiom did not repurchase any shares. Since Aug 2011, the company has repurchased 12.9 million shares or about 16% of the outstanding stock for $202 million under the share repurchase program.

Outlook

For fiscal 2015 Axciom reiterated its guidance. Revenues are expected to be down approximately 4% year over year, driven by the impact of lost IT infrastructure management customers and the exit of analog paper survey business in Europe. The company expects AOS and Live Ramp to generate approximately $60 million in revenues in fiscal 2015.

Earning per share are expected in the range of 73 cents to 78 cents. This guidance includes the impact of the LiveRamp acquisition but excludes the impact of unusual items, non-cash compensation and acquired intangible asset amortization.

Acxiom currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look include Fair Isaac Corporation ( FICO ) and Kofax Limited ( KFX ) carrying a Zacks Rank #1 (Strong Buy), and CoStar Group Inc. ( CSGP ), carrying a Zacks Rank #2 (Buy).

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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 Nasdaq, Inc.


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

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