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TransUnion (TRU) Beats Q4 Earnings & Revenues, Offers View

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

TransUnion Price, Consensus and EPS Surprise | TransUnion Quote

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.

Segmental Details

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.

Margins

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.

Guidance

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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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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