Acxiom Beats Estimates

Acxiom Corporation (ACXM - Analyst Report) reported Non-GAAP net income of $17.1 million, rising 12.2% year over year and 9.3% sequentially. Diluted EPS came in at 22 cents compared to 19 cents in the previous year quarter, beating our Zacks Consensus Estimate of 20 cents.

Revenues

Net sales came in at $281 million for the third quarter of fiscal 2012, decreasing 2% annually and 6.3% sequentially.

The Marketing and Data Services segment sales marginally fell about 0.4% year over year to $188 million. This was primarily due to the foreign market slowdown which offset the domestic revenue growths in this quarter. The company’s IT Infrastructure Management segment also declined around 2% annually to $77 million. No signs of growth were visible from the other services of ACXM either as revenues fell 21% year over year to $16 million during the quarter.

Margins

Total operating margin (excluding unusual items) came in at 11% compared to10.4% in the previous year quarter and 5.3% in the last quarter.

Marketing and Data Services operating margin was around 11.6% compared to 11.3% in the previous year quarter. The IT Infrastructure Management segment produced an operating margin of 12.7%, rising from 10.9% in the third quarter of fiscal 2011. Other Services operating margin fell drastically to (6.1%) from 1.2% in the previous year quarter.

Balance Sheet and Cash Flows

Acxiom ended the quarter with cash and cash equivalents of $146 million versus $119 million at the end of the previous quarter. Net trade accounts receivable came in at $171 million falling from $181 million at the end of the second quarter of fiscal 2012.

Long-term debt came at $257 million at the end of the third quarter of fiscal 2012 falling from $285 million at the end of the previous quarter. Deferred revenues also increased to around $70 million during the quarter from $53 million in the previous quarter of fiscal 2012.

The company’s operating cash flows of $83 million during the quarter rose 29% from the previous year period. Free cash flow generated in the quarter came in at $55 million, increasing comprehensively about 58% annually.

Management was quite pleased and content with its cash flow situation of the third quarter of fiscal 2012.

Outlook

Top-line growth in the Marketing and Data Services segment seems to be on the cards for the next quarter. Furthermore, management expressed its concerns with regard to international business slowdown, catering to which they plan to steer focus towards ameliorating growth in its offshore markets in the coming quarters. New data analytics and product innovations are also expected to be ventured into by the new management team with advanced operational and management strategies.

Read the full analyst report on ACXM