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Information technology services provider Acxiom Corporation (ACXM - Analyst Report) reported first quarter fiscal 2014 net income of $13.2 million or 17 cents per share compared with $13.3 million or 17 cents in the year-ago quarter. The reported earnings marginally beat the Zacks Consensus Estimate by a penny.


Total revenue for first quarter fiscal 2014 came in at $266.2 million, down 2.0% year over year owing to below-par performance from all segments.

By segments, the Marketing and Data Services segment sales declined 2.4% year over year to $1187.8 million in the reported quarter. IT Infrastructure Management segment revenues dipped 1.3% to $69.4 million. Revenue from Other Services segment improved 1.4% year over year to $9.0 million in the reported quarter.


Operating margin for the reported quarter dropped to 9.0% versus 9.4% in the year-ago quarter due to lower margin from Marketing and Data Services segment, which account for bulk of the revenues.

Marketing and Data Services operating margin was 6.7% compared with 9.7% in the previous-year quarter. The IT Infrastructure Management segment reported an operating margin of 15.5%, up from 12.6% in the year-ago quarter.

Balance Sheet and Cash Flows

Acxiom ended the quarter with cash and cash equivalents of $207.6 million. Long-term debt came in at $233.8 million.

Net cash provided by operating activities aggregated $16.8 million during the reported quarter compared to net cash used of $1.9 million in the prior-year period. Operating cash flow was $169 million for the trailing twelve month period, compared with $195 million in the year-ago period. Free cash flow to equity stood at $70 million for the trailing twelve-month period, compared with $175 million for the prior-year period.

Share Repurchase

In the reported quarter, Acxiom repurchased 720,000 shares for $16.1 million. Since Aug 2011, the company has repurchased 11.1 million shares for $156 million. Acxiom’s total share repurchase authorization is $200 million.


Concurrent with the earnings release, management reiterated its guidance for fiscal 2014. For fiscal 2014, management expects both revenues and earnings to remain flat annually. Management opined that fiscal 2013 was a transition period for the company, wherein it invested considerably for new product innovation and strengthening its client base. Acxiom expects to continue with these initiatives in fiscal 2014, thereby reaping synergistic benefits in future.

Acxiom currently has a Zacks Rank #3 (Hold). Other stocks in the industry such as The ADT Corporation (ADT - Analyst Report), Verisk Analytics, Inc. (VRSK - Snapshot Report) and McGraw Hill Financial, Inc. Com (MHFI - Analyst Report), each with a Zacks Rank #2 (Buy), are worth considering at the moment.

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