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Equifax (EFX) Surpasses Q3 Earnings & Revenue Estimates

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Equifax Inc. (EFX - Free Report) reported better-than-expected third-quarter 2020 results.

Adjusted earnings of $1.87 per share beat the Zacks Consensus Estimate by 16.2% and improved 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.

Revenues of $1.07 billion outpaced the consensus estimate by 5.9% and improved 22% year over year on a reported basis as well as on a local-currency basis. The reported figure exceeded the guided range of $930-$950 million.

So far this year, shares of Equifax have gained 15.9%, compared with 2.2% growth of the industry it belongs to and 7% increase of the Zacks S&P 500 composite.

 

Let’s check out the numbers in detail.

Segmental Revenues

Revenues in the U.S. Information Solutions division came in at $386.3 million, up 22% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $284.7 million were up 22% year over year on a reported basis and 15% on an adjusted basis. Mortgage Solutions’ revenues of $55.4 million improved 51% year over year. Financial Marketing Services’ revenues came in at $46.2 million, up 1% year over year on a reported basis but down 9% on an adjusted basis. The segment contributed 36% of total revenues.

Revenues in the International division totaled $218 million, down 5% year over year on both reported and local-currency basis. Asia Pacific revenues of $80.2 million grew 4% year over year on a reported basis but were flat on a local-currency basis. Revenues from Europe came in at $58.7 million, down 9% year over year on a reported basis and 13% on a local-currency basis. Latin America revenues of $40.4 million declined 18% year over year on a reported basis and 6% on a local-currency basis. Canada revenues of $38.7 million declined 1% year over year on a reported basis and were flat on a local-currency basis.

Revenues in the Workforce Solutions segment totaled $376.8 million, up 57% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $301.1 million were up 63% year over year. Employer Services revenues of $75.7 million were up 37% year over year. Workforce Solutions contributed 35% of total revenues.

Revenues in the Global Consumer Solutions segment amounted to $87.2 million, down 2% year over year on both reported and local-currency basis. The segment contributed 8% of total revenues.

Operating Results

Adjusted EBITDA in the third quarter of 2020 came in at $353.2 million compared with $296.2 million in the year-ago quarter. Adjusted EBITDA margin rose to 36.6% from 33.9% in the year-ago quarter.

Adjusted EBITDA margin for USIS was 46% compared with 44% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 32.3% compared with 30.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 57.8% compared with 48.8% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 24.8% compared with 24.9% in the year-ago quarter.

Equifax, Inc. Price, Consensus and EPS Surprise

 

Equifax, Inc. Price, Consensus and EPS Surprise

Equifax, Inc. price-consensus-eps-surprise-chart | Equifax, Inc. Quote

Balance Sheet and Cash Flow

Equifax exited third-quarter 2020 with cash and cash equivalents of $1.54 billion compared with $1.35 billion at the end of the prior quarter. Long-term debt was $3.28 billion compared with $3.87 billion at the end of the prior quarter.

The company generated $367 million of cash from operating activities and capex was $116.7 million. Also, Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.

Currently, Equifax carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2020 earnings of key players like S&P Global (SPGI - Free Report) , Fiserv and Waste Connections (WCN - Free Report) . While S&P Global and Fiserv are slated to release their results on Oct 27, Waste Connections is scheduled to release the same on Oct 28.

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