IHS Markit Ltd. reported mixed third-quarter fiscal 2019 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share of 67 cents beat the consensus mark by 4 cents and increased 16% on a year-over-year basis. Total revenues came in at $1.11 billion, missing the consensus mark by $16 million but improving 11% from the year-ago quarter.
We observe that shares of IHS Markit have gained 23.3% over the past year, outperforming 19% rally of the industry it belongs to.
Quarter Details
Revenues at the Resources segment totaled $230 million, up 9% year over year, with recurring revenues rising 5% organically. The Transportation segment experienced year-over-year revenue growth of 6% to reach $314.9 million. Recurring revenues at this segment grew 10% organically.
Revenues at the CMS segment amounted to $138.6 million, up 1% year over year, with no organic growth in recurring revenues. Financial services segment’s revenues increased 21% year over year to $428.8 million with 6% organic growth.
Recurring fixed revenues of $799.9 million rose 11% year over year on a reported basis and 7% on an organic basis. Recurring variable revenues of $144.4 million grew 16% year over year on a reported basis and 5% on an organic basis. Non-recurring revenues totaled $168 million, up 6% year over year on a reported basis and 4% on an organic basis.
IHS Markit Ltd. Revenue (TTM)
Adjusted EBITDA of $452.9 million increased 16% from the year-ago quarter. Adjusted EBITDA margin improved 170 points (bps) year over year to 40.7%.
IHS Markit ended the quarter with cash and cash equivalent balance of $124.1 million compared with $109.5 million in the prior quarter. Long-term debt was $5.05 billion compared with $4.9 billion in the previous quarter.
Cash flow from operations and free cash flow amounted to $412.9 million and $342.9 million, respectively, in the quarter. CapEx was $70 million. The company repurchased $200 million of shares in the quarter.
Fiscal 2019 Outlook
IHS Markit expects revenues in the range of $4.40 billion to $4.42 billion, including organic growth of 5% to 6% (including Ipreo). The Zacks Consensus Estimate for revenues is pegged at $4.45 billion. Adjusted EBITDA is expected in the range of $1.75 billion to $1.78 billion. Adjusted EPS is anticipated in the range of $2.52 to $2.57. The Zacks Consensus Estimate is pegged at $2.57.
Zacks Rank & Stocks to Consider
IHS Markit currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Zacks Business Services sector are Huron Consulting (HURN - Free Report) , Charles River Associates (CRAI - Free Report) and Fiserv . While Fiserv sports a Zacks Rank #1 (Strong Buy), Huron Consulting and Charles River Associates carry a Zacks Rank #2 (Buy).
Long-term earnings (three to five years) growth rate for Huron Consulting, Charles River Associates and Fiserv is estimated 13.5%, 13% and 12%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
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IHS Markit Ltd. reported mixed third-quarter fiscal 2019 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share of 67 cents beat the consensus mark by 4 cents and increased 16% on a year-over-year basis. Total revenues came in at $1.11 billion, missing the consensus mark by $16 million but improving 11% from the year-ago quarter.
We observe that shares of IHS Markit have gained 23.3% over the past year, outperforming 19% rally of the industry it belongs to.
Quarter Details
Revenues at the Resources segment totaled $230 million, up 9% year over year, with recurring revenues rising 5% organically. The Transportation segment experienced year-over-year revenue growth of 6% to reach $314.9 million. Recurring revenues at this segment grew 10% organically.
Revenues at the CMS segment amounted to $138.6 million, up 1% year over year, with no organic growth in recurring revenues. Financial services segment’s revenues increased 21% year over year to $428.8 million with 6% organic growth.
Recurring fixed revenues of $799.9 million rose 11% year over year on a reported basis and 7% on an organic basis. Recurring variable revenues of $144.4 million grew 16% year over year on a reported basis and 5% on an organic basis. Non-recurring revenues totaled $168 million, up 6% year over year on a reported basis and 4% on an organic basis.
IHS Markit Ltd. Revenue (TTM)
Adjusted EBITDA of $452.9 million increased 16% from the year-ago quarter. Adjusted EBITDA margin improved 170 points (bps) year over year to 40.7%.
IHS Markit ended the quarter with cash and cash equivalent balance of $124.1 million compared with $109.5 million in the prior quarter. Long-term debt was $5.05 billion compared with $4.9 billion in the previous quarter.
Cash flow from operations and free cash flow amounted to $412.9 million and $342.9 million, respectively, in the quarter. CapEx was $70 million. The company repurchased $200 million of shares in the quarter.
Fiscal 2019 Outlook
IHS Markit expects revenues in the range of $4.40 billion to $4.42 billion, including organic growth of 5% to 6% (including Ipreo). The Zacks Consensus Estimate for revenues is pegged at $4.45 billion. Adjusted EBITDA is expected in the range of $1.75 billion to $1.78 billion. Adjusted EPS is anticipated in the range of $2.52 to $2.57. The Zacks Consensus Estimate is pegged at $2.57.
Zacks Rank & Stocks to Consider
IHS Markit currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Zacks Business Services sector are Huron Consulting (HURN - Free Report) , Charles River Associates (CRAI - Free Report) and Fiserv . While Fiserv sports a Zacks Rank #1 (Strong Buy), Huron Consulting and Charles River Associates carry a Zacks Rank #2 (Buy).
Long-term earnings (three to five years) growth rate for Huron Consulting, Charles River Associates and Fiserv is estimated 13.5%, 13% and 12%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
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.
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