A month has gone by since the last earnings report for Dun & Bradstreet Corporation (The) . Shares have added about 11.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is DNB due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
First-quarter 2018 Results
The Dun & Bradstreet Corporation reported strong first-quarter 2018 results with earnings and revenues surpassing the Zacks Consensus Estimate.
Adjusted earnings of $1.24 per share beat the consensus mark by 20 cents and increased 30.5% year over year. Total revenues of $418.2 million beat the Zacks Consensus Estimate of $387.4 million. The figure was up 9.6% year over year.
Adjusted revenues of $384.7 million were up 0.2% from the year-ago quarter. Organic revenues in the reported quarter grew 0.4% from the year-ago quarter and were in line with adjusted revenues.
Revenues by Segment
Americas segment (83% of total revenues) revenues increased 9.9% from the year-ago quarter to $345.7 million. Adjusted revenues of $311.5 million were down 2% year over year. In terms of product lines, adjusted Risk Management Solutions revenues from Americas decreased 3.7% year over year to $175.2 million. Sales and Marketing Solutions revenues from the region grew 1.5% from the year-ago quarter to $136.3 million.
Non-Americas segment (17% of total revenues) revenues increased 8.2% from the year-ago quarter to $72.5 million. Adjusted revenues of $73.2 million were up 8% year over year. In terms of product lines, adjusted Risk Management Solutions revenues from Non-Americas increased 6.9% year over year to $58.2 million. Sales and Marketing Solutions grew 14.5% from the year-ago quarter to $15 million.
Total operating income came in at $94.7 million compared with $41.3 million in the year-ago quarter. Americas operating income was $106.4 million, up 85% year over year. Non-Americas operating income was $20.4 million, up 12% year over year. Adjusted operating income increased 6.4% year over year to $71.9 million. Adjusted operating income for Americas was $71.6 million, up 2% year over year. Adjusted operating income for Non-Americas was $21.2 million, up 13% year over year.
Operating income margin rose to 22.6% from 10.8% in the year-ago quarter. Adjusted operating income margin was 17.2% compared with 17.7% in the year-ago quarter. On an adjusted basis, total operating costs grew 1.1% from the year-ago quarter to $312.8 million.
Balance Sheet and Cash Flow
Dun & Bradstreet exited first-quarter 2018 with cash and cash equivalents of $188.1 million compared with $442.4 million at the end of December 2017. As of Mar 31, 2018, long-term debt was $1.3 billion, down from $1.6 billion at the end of December 2017. The company’s net debt position was $1.1 billion compared with $1.2 billion as of Dec 31, 2017.
The company generated $121.6 million of cash from operating activities in the reported quarter compared with $123.8 million in the year-ago quarter. Free cash flow was $106.7 million compared with $108.3 million in the year-ago quarter.
Concurrent with the earnings release, Dun & Bradstreet announced a quarterly cash dividend of 52.25 cents per share. The dividend will be paid on Jun 8 to shareholders of record at the close of business on May 23.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There have been three revisions higher for the current quarter compared to three lower.
Dun & Bradstreet Corporation (The) Price and Consensus
At this time, DNB has an average Growth Score of C, a grade with the same score on the momentum front. The stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores the stock is more suitable for value investors than those looking for growth and momentum.
DNB has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.