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IHS Markit's (INFO) Q1 Earnings Beat Estimates, Increase Y/Y

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IHS Markit Ltd. (INFO - Free Report) reported impressive first-quarter fiscal 2021 results, with both earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings per share of 71 cents beat the consensus mark by 1.4% and increased 7.6% on a year-over-year basis. Total revenues came in at $1.12 billion, surpassing the consensus mark by 1% and increasing 3.6% from the year-ago quarter on a reported basis and 3% organically.

We observe that shares of IHS Markit have gained 62.3% over the past year, significantly outperforming the 28.9% rally of the industry it belongs to.

Quarterly Details

Financial services segment’s revenues increased 11% year over year on a reported basis, and 10% on an organic basis, to $485 million. Revenues at the Resources segment totaled $203 million, down 10% year over year on a reported basis as well as organically.

The Transportation segment witnessed year-over-year revenue growth of 5% on a reported basis to reach $312 million. Revenues increased 4% organically. Revenues at the Consolidated Markets & Solutions segment amounted to $121 million, down 1% year over year on a reported basis as well as organically.

Recurring fixed revenues of $825.6 million were up 3% year over year on a reported basis and 2% organically. Recurring variable revenues of $172.9 million grew 18% year over year on a reported and 17% on an organic basis. Non-recurring revenues totaled $121.4 million, down 7% year over year on a reported as well as an organic basis.

Adjusted EBITDA of $466.8 million was up 8% from the year-ago quarter. Adjusted EBITDA margin improved 180 basis points (bps) year over year to 41.7%.

IHS Markit ended the quarter with cash and cash equivalent balance of $172 million, compared with $125.6 million in the prior quarter. Long-term debt was $4.6 billion, flat with the previous quarter’s figure.

Cash flow from operations and free cash flow amounted to $244.5 million and $171.9 million, respectively, in the quarter. CapEx was $72.6 million. The company paid out $79.3 million in dividends in the quarter.

Zacks Rank and Stocks to Consider

IHS Markit currently carries a Zacks Rank #3 (Hold).

Some better-ranked service stocks are ExlService ((EXLS - Free Report) , Gartner, Inc. (IT - Free Report) ) and Blucora ((BCOR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected earnings per share (three to five years) growth rate for ExlService, Gartner and Blucora is pegged at 9.4%, 13.5% and 15%, respectively.

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