We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
FactSet Research Systems Inc. (FDS - Free Report) ended fiscal 2017 on a strong note with reporting better-than-expected results for the fourth quarter. The company’s top and bottom lines also marked a significant year over year improvement.
The company reported adjusted earnings per share of $1.90, which surpassed the Zacks Consensus Estimate by a penny. The figure was toward the higher end of the guided range of $1.86 to $1.92 per share. Moreover, adjusted earnings improved 12.4% on a year-over-year basis.
Quarter Details
FactSet’s revenues of $326.6 million increased 13.7% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $325 million. Moreover, reported revenues were toward the higher-end of management’s guidance range of $321 million-$328 million. Organic revenues increased 6.3% year over year to $301.3 million during the quarter.
FactSet witnessed better-than-expected growth across products and geographic regions, which aided quarterly revenues.
In the reported quarter, FactSet’s revenues from U.S. increased to $204.1 million while international revenues grew to $122.6 million. Excluding the impact of foreign currency, acquisitions and disposition, U.S. revenues and international revenues rose 5.6% and 7.6%, respectively, on a year-over-year basis.
The company’s Annual Subscription Value (ASV) increased 5.7% year over year to $1.32 billion as of Aug 31, 2017. Of this, nearly 84% was generated by buy-side clients while the rest can be attributed to sell-side firms performing functions like mergers & acquisition, advisory work and equity research.
FactSet added 115 clients in the reported quarter, taking the tally to 4,744. The company retained 91% of its clients. The percentage of client retention was more than 95% of ASV.
Coming to the operational metrics, FactSet reported a 22.4% rise in total operating expenses, primarily due to acquisitions and some restructuring expenses. As a percentage of revenues, operating expenses increased 530 basis points (bps) to 74.8%.
FactSet’s adjusted operating income increased 6.9% from the year-ago quarter to $100.3 million. However, operating margin decreased 220 bps year over year at 31.2%, owing to increased operating expenses as a percentage of revenues.
Adjusted net income during the quarter was $74.7 million compared with $68.6 million in the year-ago quarter.
FactSet exited the quarter with $194.7 million in cash and cash equivalents, compared with $161.7 million from the previous quarter. Long-term debt at the end of fiscal 2017 amounted to $575 million.
Cash flow from operations during the fiscal was $320.5 million. The company generated free cash flow of $283.7 million in the fiscal.
FactSet repurchased $281 million worth of its common stock under its existing share repurchase authorization. The company has still $244 million remaining under the share repurchase authorization. Moreover, it paid dividend $80.9 million in fiscal 2017.
Guidance
The company initiated guidance for the first quarter of fiscal 2018. For the fiscal first quarter, FactSet expects revenues in the range of $327 million-$333 million (mid-point $328 million). The Zacks Consensus Estimate is pegged at $328.27 million.
Adjusted operating margin is expected between 31% and 32%. Adjusted earnings per share are projected in the band of $1.93-$1.99 (mid-point $1.96). The Zacks Consensus Estimate stands at $1.94. The annual effective tax rate is expected within 25%-26%.
Bottom Line
FactSet reported better-than-expected results for the fourth quarter. Moreover, we are encouraged by favorable year-over-year comparisons on both counts. Moreover, FactSet has a high client retention ratio, which is a positive. Also, ASV increased year over year and added a good number of clients. Furthermore, the company provided an encouraging guidance for the first quarter of fiscal 2018.
The company continues with product innovation across its segments with special emphasis on financial services to gain customers. Moreover, the company’s acquisitions of Portware, Revere Data, Matrix Data, Code Red and BISAM Technologies S.Awill enhance its product suite and help it evolve as a global financial database company. It will also help FactSet to maximize value for its partners and provide exclusive content set.
The share repurchase program is expected to support earnings in the long run apart from boosting shareholder value.
Nonetheless, substitute products at competitive prices, from the likes of Bloomberg L.P., Dow Jones & Company Inc., MSCI Inc. (MSCI - Free Report) and Thomson Reuters (TRI - Free Report) , is giving tough competition to FactSet.
Notably, FactSet has underperformed the industry to which it belongs to in the year-to-date period. The stock has just returned 9.5% while the industry has gained 21.7%.
FormFactor has a long-term expected EPS growth rate of 16%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
FactSet (FDS) Tops Q4 Earnings & Revenues Estimates
FactSet Research Systems Inc. (FDS - Free Report) ended fiscal 2017 on a strong note with reporting better-than-expected results for the fourth quarter. The company’s top and bottom lines also marked a significant year over year improvement.
The company reported adjusted earnings per share of $1.90, which surpassed the Zacks Consensus Estimate by a penny. The figure was toward the higher end of the guided range of $1.86 to $1.92 per share. Moreover, adjusted earnings improved 12.4% on a year-over-year basis.
Quarter Details
FactSet’s revenues of $326.6 million increased 13.7% from the year-ago quarter and surpassed the Zacks Consensus Estimate of $325 million. Moreover, reported revenues were toward the higher-end of management’s guidance range of $321 million-$328 million. Organic revenues increased 6.3% year over year to $301.3 million during the quarter.
FactSet witnessed better-than-expected growth across products and geographic regions, which aided quarterly revenues.
In the reported quarter, FactSet’s revenues from U.S. increased to $204.1 million while international revenues grew to $122.6 million. Excluding the impact of foreign currency, acquisitions and disposition, U.S. revenues and international revenues rose 5.6% and 7.6%, respectively, on a year-over-year basis.
The company’s Annual Subscription Value (ASV) increased 5.7% year over year to $1.32 billion as of Aug 31, 2017. Of this, nearly 84% was generated by buy-side clients while the rest can be attributed to sell-side firms performing functions like mergers & acquisition, advisory work and equity research.
FactSet added 115 clients in the reported quarter, taking the tally to 4,744. The company retained 91% of its clients. The percentage of client retention was more than 95% of ASV.
Coming to the operational metrics, FactSet reported a 22.4% rise in total operating expenses, primarily due to acquisitions and some restructuring expenses. As a percentage of revenues, operating expenses increased 530 basis points (bps) to 74.8%.
FactSet’s adjusted operating income increased 6.9% from the year-ago quarter to $100.3 million. However, operating margin decreased 220 bps year over year at 31.2%, owing to increased operating expenses as a percentage of revenues.
Adjusted net income during the quarter was $74.7 million compared with $68.6 million in the year-ago quarter.
FactSet exited the quarter with $194.7 million in cash and cash equivalents, compared with $161.7 million from the previous quarter. Long-term debt at the end of fiscal 2017 amounted to $575 million.
Cash flow from operations during the fiscal was $320.5 million. The company generated free cash flow of $283.7 million in the fiscal.
FactSet repurchased $281 million worth of its common stock under its existing share repurchase authorization. The company has still $244 million remaining under the share repurchase authorization. Moreover, it paid dividend $80.9 million in fiscal 2017.
Guidance
The company initiated guidance for the first quarter of fiscal 2018. For the fiscal first quarter, FactSet expects revenues in the range of $327 million-$333 million (mid-point $328 million). The Zacks Consensus Estimate is pegged at $328.27 million.
Adjusted operating margin is expected between 31% and 32%. Adjusted earnings per share are projected in the band of $1.93-$1.99 (mid-point $1.96). The Zacks Consensus Estimate stands at $1.94. The annual effective tax rate is expected within 25%-26%.
Bottom Line
FactSet reported better-than-expected results for the fourth quarter. Moreover, we are encouraged by favorable year-over-year comparisons on both counts. Moreover, FactSet has a high client retention ratio, which is a positive. Also, ASV increased year over year and added a good number of clients. Furthermore, the company provided an encouraging guidance for the first quarter of fiscal 2018.
The company continues with product innovation across its segments with special emphasis on financial services to gain customers. Moreover, the company’s acquisitions of Portware, Revere Data, Matrix Data, Code Red and BISAM Technologies S.Awill enhance its product suite and help it evolve as a global financial database company. It will also help FactSet to maximize value for its partners and provide exclusive content set.
The share repurchase program is expected to support earnings in the long run apart from boosting shareholder value.
Nonetheless, substitute products at competitive prices, from the likes of Bloomberg L.P., Dow Jones & Company Inc., MSCI Inc. (MSCI - Free Report) and Thomson Reuters (TRI - Free Report) , is giving tough competition to FactSet.
Notably, FactSet has underperformed the industry to which it belongs to in the year-to-date period. The stock has just returned 9.5% while the industry has gained 21.7%.
Currently, FactSet carries a Zacks Rank #3 (Hold). A better-ranked stock worth considering in the broader technology sector is FormFactor, Inc. (FORM - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FormFactor has a long-term expected EPS growth rate of 16%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>