It has been about a month since the last earnings report for IHS Markit . Shares have added about 1.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is IHS Markit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
IHS Markit Tops Q2 Earnings Beat Estimates, Revenues Lag
IHS Markit reported mixed first-quarter fiscal 2020 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share of 69 cents beat the consensus mark by 6.2% but decreased 3% on a year-over-year basis. Total revenues came in at $1.03 billion, missing the consensus mark by 2.1% and declining 10% from the year-ago quarter on a reported basis. Revenues declined 7% organically.
Quarterly Details
Revenues at the Resources segment totaled $219 million, down 12% year over year on a reported basis and 14% organically. The Transportation segment witnessed year-over-year revenue decline of 24% on a reported basis and 18% organically to reach $243 million.
Revenues at the Consolidated Markets & Solutions segment amounted to $121 million, down 10% year over year on a reported basis but up 2% organically. Financial services segment’s revenues increased 2% year over year to $444 million, with 3% organic growth.
Recurring fixed revenues of $755.2 million were down 4% year over year on a reported basis and 1% on an organic basis. Recurring variable revenues of $158 million grew 9% year over year on a reported basis and 10% on an organic basis. Non-recurring revenues totaled $113 million, down 45% year over year on a reported basis and 40% on an organic basis.
Adjusted EBITDA of $454 million declined 2% from the year-ago quarter. Adjusted EBITDA margin improved 320 points (bps) year over year to 44.2%.
IHS Markit ended the quarter with cash and cash equivalent balance of $207.8 million compared with $143.9 million in the prior quarter. Long-term debt was $5.1 billion compared with $5 billion in the previous quarter.
Cash flow from operations and free cash flow amounted to $278.2 million and $208.6 million, respectively, in the quarter. CapEx was $69.6 million. The company repurchased $250 million of shares and paid out $67.7 million in dividends in the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.45% due to these changes.
VGM Scores
At this time, IHS Markit has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, IHS Markit has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Image: Bigstock
IHS Markit (INFO) Up 1.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for IHS Markit . Shares have added about 1.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is IHS Markit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
IHS Markit Tops Q2 Earnings Beat Estimates, Revenues Lag
IHS Markit reported mixed first-quarter fiscal 2020 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share of 69 cents beat the consensus mark by 6.2% but decreased 3% on a year-over-year basis. Total revenues came in at $1.03 billion, missing the consensus mark by 2.1% and declining 10% from the year-ago quarter on a reported basis. Revenues declined 7% organically.
Quarterly Details
Revenues at the Resources segment totaled $219 million, down 12% year over year on a reported basis and 14% organically. The Transportation segment witnessed year-over-year revenue decline of 24% on a reported basis and 18% organically to reach $243 million.
Revenues at the Consolidated Markets & Solutions segment amounted to $121 million, down 10% year over year on a reported basis but up 2% organically. Financial services segment’s revenues increased 2% year over year to $444 million, with 3% organic growth.
Recurring fixed revenues of $755.2 million were down 4% year over year on a reported basis and 1% on an organic basis. Recurring variable revenues of $158 million grew 9% year over year on a reported basis and 10% on an organic basis. Non-recurring revenues totaled $113 million, down 45% year over year on a reported basis and 40% on an organic basis.
Adjusted EBITDA of $454 million declined 2% from the year-ago quarter. Adjusted EBITDA margin improved 320 points (bps) year over year to 44.2%.
IHS Markit ended the quarter with cash and cash equivalent balance of $207.8 million compared with $143.9 million in the prior quarter. Long-term debt was $5.1 billion compared with $5 billion in the previous quarter.
Cash flow from operations and free cash flow amounted to $278.2 million and $208.6 million, respectively, in the quarter. CapEx was $69.6 million. The company repurchased $250 million of shares and paid out $67.7 million in dividends in the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.45% due to these changes.
VGM Scores
At this time, IHS Markit has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, IHS Markit has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.