IHS Markit Ltd. reported better-than-expected third-quarter fiscal 2018 results.
Adjusted EPS of 58 cents outpaced the Zacks Consensus Estimate of 55 cents and increased 2% on a year-over-year basis. Total revenues came in at $1 billion, which surpassed the consensus mark of $969 million and improved 11% from the year-ago quarter number.
The company’s strong results were driven by continued focus on operational execution. So far this year, the stock has gained 20.3%, outperforming the S&P 500’s 9.2% rally.
Segmental Revenues
Revenues at the Resources segment totaled $212 million, up 5% year over year, with recurring revenues rising 4% organically. The Transportation segment experienced year-over-year revenue growth of 16% to reach $297 million. Recurring revenues at this segment grew 10% organically.
Revenues at the CMS segment amounted to $137 million, down 1% year over year, with 3% organic growth of recurring revenues. The Financial services segment’s revenues improved 16% year over year to $355 million and included 8% total organic growth.
Revenues by Transaction Type
Recurring fixed revenues of $717.7 million, rose 13% year over year on a reported basis and 7% on an organic basis. Recurring variable revenues grew 14% year over year on a reported basis and 8% organically to $124.8 million. Non-recurring revenues summed $158.5 million, up 1% year over year on a reported as well as organic basis.
IHS Markit Ltd. Revenue (TTM)
Operating Performance
Adjusted EBITDA of $390.5 million, increased 11% from the year-ago quarter. Adjusted EBITDA margin improved 20 basis points (bps) year over year to 39%.
Segment-wise, Resources, Transportation, CMS and Financial Services adjusted EBITDAs were $85 million (4% year-over-year decline), $128 million (16% year-over-year growth), $30 million (5% decline) and $156 million (13% growth), respectively.
Adjusted EBITDA margins expanded 30 bps at the Transportation segment. The same declined a respective 360 bps, 100 bps and 100 bps for the Resources, CMS and Financial Services segments.
Key Balance Sheet and Cash flow Figures
IHS Markit ended the quarter with a cash and cash equivalent balance of $154.4 million compared with $159 million in the prior quarter. Long-term debt was $4.9 billion at the end of the fiscal third quarter compared with $4.4 billion at the end of the prior quarter.
Cash flow from operations and free cash flow amounted to $346.4 million and $292.6 million, respectively, in the quarter.
Fiscal 2018 Outlook
IHS Markit raised its fiscal 2018 guidance. Revenues are now expected in the range of $4-$4.02 billion, including organic growth of 6%. Previously, revenues were anticipated in the $3.85-$3.90 billion band, including organic growth of 5-6%.
Adjusted EBITDA is now envisioned in the range of $1.550-$1.560 billion compared with the previous guidance of $1.500-$1.525 billion. The company raised the lower limit of Adjusted EPS guidance. Adjusted EBITDA is now projected in the range of $2.25-$2.27 compared with the earlier guidance of $2.23-$2.27.
Zacks Rank & Other Stocks to Consider
Currently, IHS Markit has a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Business Services sector include CRA International (CRAI - Free Report) , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) . While CRA International and FTI Consulting sport a Zacks Rank #1 (Strong Buy), NV5 Global carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CRA International, FTI Consulting and NV5 Global have an impressive earnings surprise history, with an average four-quarter surprise of 38.6%, 58.3% and 12.7%, respectively.
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IHS Markit Ltd. reported better-than-expected third-quarter fiscal 2018 results.
Adjusted EPS of 58 cents outpaced the Zacks Consensus Estimate of 55 cents and increased 2% on a year-over-year basis. Total revenues came in at $1 billion, which surpassed the consensus mark of $969 million and improved 11% from the year-ago quarter number.
The company’s strong results were driven by continued focus on operational execution. So far this year, the stock has gained 20.3%, outperforming the S&P 500’s 9.2% rally.
Segmental Revenues
Revenues at the Resources segment totaled $212 million, up 5% year over year, with recurring revenues rising 4% organically. The Transportation segment experienced year-over-year revenue growth of 16% to reach $297 million. Recurring revenues at this segment grew 10% organically.
Revenues at the CMS segment amounted to $137 million, down 1% year over year, with 3% organic growth of recurring revenues. The Financial services segment’s revenues improved 16% year over year to $355 million and included 8% total organic growth.
Revenues by Transaction Type
Recurring fixed revenues of $717.7 million, rose 13% year over year on a reported basis and 7% on an organic basis. Recurring variable revenues grew 14% year over year on a reported basis and 8% organically to $124.8 million. Non-recurring revenues summed $158.5 million, up 1% year over year on a reported as well as organic basis.
IHS Markit Ltd. Revenue (TTM)
Operating Performance
Adjusted EBITDA of $390.5 million, increased 11% from the year-ago quarter. Adjusted EBITDA margin improved 20 basis points (bps) year over year to 39%.
Segment-wise, Resources, Transportation, CMS and Financial Services adjusted EBITDAs were $85 million (4% year-over-year decline), $128 million (16% year-over-year growth), $30 million (5% decline) and $156 million (13% growth), respectively.
Adjusted EBITDA margins expanded 30 bps at the Transportation segment. The same declined a respective 360 bps, 100 bps and 100 bps for the Resources, CMS and Financial Services segments.
Key Balance Sheet and Cash flow Figures
IHS Markit ended the quarter with a cash and cash equivalent balance of $154.4 million compared with $159 million in the prior quarter. Long-term debt was $4.9 billion at the end of the fiscal third quarter compared with $4.4 billion at the end of the prior quarter.
Cash flow from operations and free cash flow amounted to $346.4 million and $292.6 million, respectively, in the quarter.
Fiscal 2018 Outlook
IHS Markit raised its fiscal 2018 guidance. Revenues are now expected in the range of $4-$4.02 billion, including organic growth of 6%. Previously, revenues were anticipated in the $3.85-$3.90 billion band, including organic growth of 5-6%.
Adjusted EBITDA is now envisioned in the range of $1.550-$1.560 billion compared with the previous guidance of $1.500-$1.525 billion. The company raised the lower limit of Adjusted EPS guidance. Adjusted EBITDA is now projected in the range of $2.25-$2.27 compared with the earlier guidance of $2.23-$2.27.
Zacks Rank & Other Stocks to Consider
Currently, IHS Markit has a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader Business Services sector include CRA International (CRAI - Free Report) , FTI Consulting (FCN - Free Report) and NV5 Global (NVEE - Free Report) . While CRA International and FTI Consulting sport a Zacks Rank #1 (Strong Buy), NV5 Global carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CRA International, FTI Consulting and NV5 Global have an impressive earnings surprise history, with an average four-quarter surprise of 38.6%, 58.3% and 12.7%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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