Equifax Inc. (EFX - Free Report) reported mixed fourth-quarter 2018 results, with earnings beating the zacks consensus estimate and revenues missing the same.
The stock declined 2.9% in the after-hours trading as guidance for the first quarter and 2019 disappointed. Management expects first-quarter 2019 revenues in the range of $840-$855 million, below the Zacks Consensus Estimate of $877 million. Adjusted EPS are anticipated between $1.15 and $1.20, which is below the Zacks Consensus Estimate of $1.40.
For 2019, revenues are expected between $3.425 billion and $3.525 billion, below the Zacks Consensus Estimate of $3.540 billion. Adjusted EPS is anticipated between $5.60 and $5.80, below the Zacks Consensus Estimate of $5.81.
In a year’s time, the stock declined 5%, against the 15.2% rise of the industry it belongs to.
Fourth-quarter adjusted earnings of $1.38 per share beat the Zacks Consensus Estimate by 6 cents and declined nearly 1% on a year-over-year basis. The figure exceeded guidance of $1.30-$1.35. Costs associated with the cybersecurity incident weighed on the bottom line.
Revenues totaled $835.3 million, which lagged the consensus mark by $5 million and fell slightly year over year. The top line was at the lower end of the guidance of $835-$850 million. Weakness in the USIS, International and Global Consumer Solutions segments resulted in year-over-year downside. This was partially offset by strength in the Workforce Solutions segment.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the USIS division grossed $307.4 million, down 2% from the year-ago quarter’s number. Within the division, Online Information Solutions revenues of $211.4 million increased slightly year over year. Mortgage Solutions revenues of $27.3 milliondeclined 17% year over year. Financial Marketing Services revenues came in at $68.7 million, down 1% year over year. The segment contributed 37% to total revenues.
Revenues in the International division totaled $236.4 million, down 3% year over year on a reported basis but up 5% on a constant-currency (cc) basis. On the international front, Equifax reported year-over-year revenue decline of 3% and 14% in Asia-Pacific and Latin, respectively. Revenues in Europe increased 2% year over year. On a local-currency basis, revenues from Asia-Pacific, Europe and Latin America grew 3%, 5% and 8%, respectively. Canada revenues rose 1% year over year on a reported basis and 5% on a local-currency basis. The segment contributed 28% to total revenues.
Revenues in the Workforce Solutions segment totaled at $205.9 million, up 12% from the year-ago quarter’s figure. The improvement includes Verification Services revenues of $145.4 million (up 15% year over year) and Employer Services revenues of $60.5 million (up 6% year over year). Workforce Solutions contributed 25% to total revenues.
Revenues in the Global Consumer Solutions segment amounted to $85.6 million, down 12% year over year on a reported as well as local-currency basis. The segment contributed 10% to total revenues.
Operating Results
Adjusted EBITDA in the fourth quarter fell 5% year over year to $277.6 million. Adjusted EBITDA margin was 33.2% compared with 34.8% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 47.5% compared with 48.5% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 32.4% compared with 28.3% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 48.7% compared with 45.5% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 21.1% compared with 32.4% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited fourth quarter with cash and cash equivalents of $223.6 million, lower than $253.4 million in the prior quarter. Long-term debt at the end of the quarter was $2.6 billion flat with the prior-quarter tally. The company generated $164.8 million of cash from operating activities and spent $113.8 million in capital expenditures. Also, Equifaxpaid dividend of $47.1 million to shareholders in the quarter.
Zacks Rank & Upcoming Releases
Equifax currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are keenly awaiting fourth-quarter 2018 earnings reports of key players like Navigant Consulting (NCI - Free Report) , FTI Consulting (FCN - Free Report) and ICFI International (ICFI - Free Report) . The companies are slated to announce results on Feb 26.
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Equifax Inc. (EFX - Free Report) reported mixed fourth-quarter 2018 results, with earnings beating the zacks consensus estimate and revenues missing the same.
The stock declined 2.9% in the after-hours trading as guidance for the first quarter and 2019 disappointed. Management expects first-quarter 2019 revenues in the range of $840-$855 million, below the Zacks Consensus Estimate of $877 million. Adjusted EPS are anticipated between $1.15 and $1.20, which is below the Zacks Consensus Estimate of $1.40.
For 2019, revenues are expected between $3.425 billion and $3.525 billion, below the Zacks Consensus Estimate of $3.540 billion. Adjusted EPS is anticipated between $5.60 and $5.80, below the Zacks Consensus Estimate of $5.81.
In a year’s time, the stock declined 5%, against the 15.2% rise of the industry it belongs to.
Fourth-quarter adjusted earnings of $1.38 per share beat the Zacks Consensus Estimate by 6 cents and declined nearly 1% on a year-over-year basis. The figure exceeded guidance of $1.30-$1.35. Costs associated with the cybersecurity incident weighed on the bottom line.
Revenues totaled $835.3 million, which lagged the consensus mark by $5 million and fell slightly year over year. The top line was at the lower end of the guidance of $835-$850 million. Weakness in the USIS, International and Global Consumer Solutions segments resulted in year-over-year downside. This was partially offset by strength in the Workforce Solutions segment.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the USIS division grossed $307.4 million, down 2% from the year-ago quarter’s number. Within the division, Online Information Solutions revenues of $211.4 million increased slightly year over year. Mortgage Solutions revenues of $27.3 milliondeclined 17% year over year. Financial Marketing Services revenues came in at $68.7 million, down 1% year over year. The segment contributed 37% to total revenues.
Revenues in the International division totaled $236.4 million, down 3% year over year on a reported basis but up 5% on a constant-currency (cc) basis. On the international front, Equifax reported year-over-year revenue decline of 3% and 14% in Asia-Pacific and Latin, respectively. Revenues in Europe increased 2% year over year. On a local-currency basis, revenues from Asia-Pacific, Europe and Latin America grew 3%, 5% and 8%, respectively. Canada revenues rose 1% year over year on a reported basis and 5% on a local-currency basis. The segment contributed 28% to total revenues.
Revenues in the Workforce Solutions segment totaled at $205.9 million, up 12% from the year-ago quarter’s figure. The improvement includes Verification Services revenues of $145.4 million (up 15% year over year) and Employer Services revenues of $60.5 million (up 6% year over year). Workforce Solutions contributed 25% to total revenues.
Revenues in the Global Consumer Solutions segment amounted to $85.6 million, down 12% year over year on a reported as well as local-currency basis. The segment contributed 10% to total revenues.
Operating Results
Adjusted EBITDA in the fourth quarter fell 5% year over year to $277.6 million. Adjusted EBITDA margin was 33.2% compared with 34.8% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 47.5% compared with 48.5% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 32.4% compared with 28.3% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 48.7% compared with 45.5% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 21.1% compared with 32.4% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited fourth quarter with cash and cash equivalents of $223.6 million, lower than $253.4 million in the prior quarter. Long-term debt at the end of the quarter was $2.6 billion flat with the prior-quarter tally. The company generated $164.8 million of cash from operating activities and spent $113.8 million in capital expenditures. Also, Equifaxpaid dividend of $47.1 million to shareholders in the quarter.
Zacks Rank & Upcoming Releases
Equifax currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are keenly awaiting fourth-quarter 2018 earnings reports of key players like Navigant Consulting (NCI - Free Report) , FTI Consulting (FCN - Free Report) and ICFI International (ICFI - Free Report) . The companies are slated to announce results on Feb 26.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
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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