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IHS Markit's (INFO) Q3 Earnings Beat Estimates, Increase Y/Y

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

Adjusted earnings per share of 85 cents beat the consensus mark by 2.4% and increased 10% on a year-over-year basis. Total revenues came in at $1.18 billion, surpassing the consensus mark by 1.1% and increasing 10.3% from the year-ago quarter on a reported basis and 9% organically.

Shares of IHS Markit have gained 53.2% over the past year, significantly outperforming the 21.7% growth of the industry it belongs to.

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

Quarterly Details

Financial services segment’s revenues increased 10% year over year on a reported basis, and 8% on an organic basis, to $490 million. Revenues at the Resources segment totaled $208 million, flat year over year on a reported basis, and declined 1% organically.

The Transportation segment witnessed year-over-year revenue growth of 16% on a reported basis to reach $347 million. Revenues increased 15% organically. Revenues at the Consolidated Markets & Solutions segment amounted to $136 million, up 12% year over year on a reported basis and 11% organically.

Recurring fixed revenues of $860 million were up 8% year over year on a reported basis and 7% organically. Recurring variable revenues of $170 million grew 11% year over year on a reported basis and 8% on an organic basis. Non-recurring revenues totaled $150.5 million, up 21% year over year on a reported basis and 20% organically.

Adjusted EBITDA of $515.6 million was up 6% from the year-ago quarter. Adjusted EBITDA margin declined 162 basis points (bps) year over year to 43.7%.

IHS Markit ended the quarter with cash and cash equivalent balance of $338 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 $421 million and $344 million, respectively, in the quarter. CapEx was $77 million. The company paid out $79.8 million in dividends in the quarter.

Zacks Rank and Stocks to Consider

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

Some better-ranked stocks in the broader Zacks Business Services sector are ManpowerGroup Inc. (MAN - Free Report) , Cross Country Healthcare, Inc. (CCRN - Free Report)  and Genpact Limited (G - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Cross Country Healthcare and Genpact is pegged at 24.2%, 9.9% and 14.7%, respectively.