TransUnionTRU reported fourth-quarter 2016 adjusted earnings of 44 cents per share, beating the Zacks Consensus Estimate of 32 cents. With this, TransUnion has beaten earnings estimates six times in a row. Robust top-line growth, along with productivity improvement initiatives, drove the company's profits.
TransUnion Price, Consensus and EPS Surprise
The company generated GAAP net income of $52.6 million compared with $21.1 million in the year-ago period. Strong growth momentum across the USIS and International segments led to the impressive bottom-line performance. GAAP EPS (earnings per share) for the quarter was 27 cents compared with 10 cents in the prior-year quarter.
Revenues for the quarter increased 13% year over year to $435.9 million, comfortably beating the Zacks Consensus Estimate of $425 million. The increase in revenues was driven by growth across the USIS and International segments.
For the full year, GAAP net income was $121 million compared with $6 million for full-year 2015. GAAP EPS for the year was 65 cents compared with 4 cents for full-year 2015.
Revenues at the USIS segment came in at $268 million, up 15% year over year. Decision Services revenues increased 18% from the year-ago quarter to $53 million. Marketing Services revenues were $45 million, an increase of 7% from the prior-year quarter. Online Data Services revenues grew 16% year over year to $170 million.
International segment's revenues rose 24% year over year to $86.2 million. However, on a constant currency basis, revenues grew an impressive 23%. Revenues from developed markets increased 14% (15% on a constant currency basis) to $29 million, while that from emerging markets went up 29% (28% on a constant currency basis) to $57 million. The company saw 16% growth in revenues from acquisitions.
Revenues at the Consumer Interactive segment came in at $97.1 million, which was flat compared with the fourth quarter of 2015.
Adjusted EBITDA (Earnings before interest, tax, depreciation and amortization) was $169.3 million compared with $136.9 million in the prior-year quarter. Adjusted EBITDA margin was 38.8%, an increase of 330 basis points from the fourth quarter of 2015.
The USIS segment's adjusted operating income was $93 million, an increase of 38% from the prior-year quarter. The rise was driven by growth in the top line.
The International segment's adjusted operating margin was $29 million, an increase of 48% (47% on a constant currency basis), driven by strong revenue growth and cost reduction.
The Consumer Interactive segment's adjusted operating was $45 million, an increase of 7% from the fourth quarter of 2015.
Balance Sheet and Cash Flow
As of Dec 31, 2016, TransUnion had cash and cash equivalents of $182.2 million. Long-term debt was $2,325.2 million at the year end. For the full year, cash flow from operating activities was $389.9 million.
The company provided its guidance for full-year 2017 as well as first-quarter 2017. Consolidated revenues for the full year are expected to be between $1.835 billion and $1.85 billion, while adjusted EPS is expected to be between $1.71 and $1.76, an increase of 14-17%.
For the first quarter, consolidated revenues are expected to be between $440 million and $445 million. Adjusted EBITDA is expected to be in the range of $162-$165 million. Adjusted EPS is expected to be between 38 cents and 39 cents, an increase of 19-22%.
TransUnion currently carries a Zacks Rank #2 (Buy). Some other favorably ranked stocks in the same space include S&P Global, Inc. SPGI and Verisk Analytics, Inc. VRSK and IHS Markit Ltd. INFO . All these stocks carry a Zacks Rank #2. You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here.
Verisk Analytics has an impressive long-term earnings growth rate of 11.6%.
IHS Markit has an impressive long-term earnings growth rate of 13.5%.
S&P Global has an impressive long-term earnings growth rate of 12.3%.
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