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IHS Markit's (INFO) Q2 Earnings Beat Estimates, Increase Y/Y

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

Adjusted earnings (excluding 41 cents from non-recurring items) per share of 81 cents beat the consensus mark by 1.3% and increased 17.4% on a year-over-year basis. Total revenues came in at $1.2 billion, surpassing the consensus mark by 3.8% and increasing 15% from the year-ago quarter’s levels on a reported basis and 13% organically.

We observe that shares of IHS Markit have gained 55.7% in the past year compared with 8.3% rise of the industry it belongs to.

Zacks Investment ResearchImage Source: Zacks Investment Research

Quarterly Details

Financial services segment’s revenues increased 11% year over year on a reported basis and 9% on an organic basis, to $493.4 million. Revenues in the Resources segment totaled $220.8 million, up 1% year over year on a reported basis.

The Transportation segment witnessed year-over-year revenue growth of 41% on a reported basis to reach $344.1 million. Revenues increased 39% organically. Revenues in the Consolidated Markets & Solutions segment amounted to $123.1 million, up 2% year over year on a reported basis and 1% organically.

Recurring fixed revenues of $836 million were up 11% year over year on a reported basis and 9% organically. Recurring variable revenues of $182.6 million increased 16% year over year on a reported and 11% on an organic basis. Non-recurring revenues totaled $162.8 million, up 44% year over year on a reported and 41% on an organic basis.

Adjusted EBITDA of $517.4 million was up 14% from the year-ago quarter’s figure. Adjusted EBITDA margin deteriorated 40 basis points (bps) year over year to 43.8%.

IHS Markit ended the quarter with cash and cash equivalent balance of $217.4 million compared with $172 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 $372 million and $301.4 million, respectively, in the quarter. CapEx was $71.2 million. The company paid out $79.7 million in dividends in the quarter.

IHS Markit Ltd. Price, Consensus and EPS Surprise

 

IHS Markit Ltd. Price, Consensus and EPS Surprise

IHS Markit Ltd. price-consensus-eps-surprise-chart | IHS Markit Ltd. Quote

 

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 CRA International, Inc. (CRAI - Free Report) . ExlService and CRA International carry a Zacks Rank #2 (Buy), while Gartner sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term expected earnings per share (three to five years) growth rate for ExlService, Gartner and CRA International is pegged at 10.8%, 13.5% and 15.5%, respectively.

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