Solera Holdings Inc.

Solera Holdings Inc. (SLH - Snapshot Report) saw revenues rise 15% in the first quarter of 2009 as the processing of auto insurance claims remained strong. The company has surprised on estimates 4 consecutive quarters by an average of 14.19%. Solera is trading at 12.3x forward earnings.

Company Description

Solera Holdings provides software and other services to the automobile insurance claims processing industry in over 50 countries. The company processes nearly $20 billion in claims for 55,000 customers each year.

Revenue Rose 15.1% in the First Quarter 2009

On Nov 5, Solera Holdings announced first-quarter 2009 earnings that beat Wall Street estimates by 24.24%, or 8 cents a share. Adjusted net income rose 67.5% to $28.2 million from $16.9 million in the year ago period. Earnings per share totaled 41 cents compared to analysts' estimates of 33 cents.

Revenue jumped 15.1% to $143 million from $124.2 million in the first quarter of 2008. Accounting for foreign currency fluctuations, revenues rose about 9.2% year-over-year. Each of the company's segments saw increases in revenues in the quarter.

Insurance company customer revenue increased 20.7% to $60.4 million from the year ago period. The Collision Repair Facility segment gained 14% while the Independent Assessor Customers segment rose 10.5%. Americas revenue climbed 5.9% and the Automotive Recycling segment gained 3.4%.

The company saw organic revenue growth rise 9.2%, up from 8.9% in the fourth-quarter 2008.

Guidance Outlook for Fiscal Year 2009

Solera's revenues have been impacted by the recent strengthening of the U.S. dollar. The company had given 2009 guidance on Oct 21, in a preliminary earnings release, but the dollar had strengthened 3% since Oct 21 and Nov 4, just before the earnings announcement.

Given the currency fluctuations, Solera revised its 2009 revenue estimates down to the range of $530 to $535 million from $542 to $548 million on Oct 21. But the company kept EPS guidance in the range of $1.56 to $1.60 per share.

Consensus Estimates Rise for the Full Year

Given the company's guidance forecast, covering analysts have been raising estimates. Full-year consensus estimates are up 8 cents in the last 30 days to $1.59.

Analysts expect 2009 year-over-year earnings growth of 60.61%.

Value Fundamentals

Solera is a Zacks #1 Rank (strong buy) stock. Its forward P/E is 12.3. It has a price-to-book of 2.85. The company has an outstanding 1-year return on equity (ROE) of 18.26%.

Read the full analyst report on SLH