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Equifax (EFX) Down on Bearish View Despite Q4 Earnings Beat
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Equifax Inc. (EFX - Free Report) reported mixed fourth-quarter 2018 results, with earnings beating the zacks consensus estimate and revenues missing the same.
The stock declined 2.9% in the after-hours trading as guidance for the first quarter and 2019 disappointed. Management expects first-quarter 2019 revenues in the range of $840-$855 million, below the Zacks Consensus Estimate of $877 million. Adjusted EPS are anticipated between $1.15 and $1.20, which is below the Zacks Consensus Estimate of $1.40.
For 2019, revenues are expected between $3.425 billion and $3.525 billion, below the Zacks Consensus Estimate of $3.540 billion. Adjusted EPS is anticipated between $5.60 and $5.80, below the Zacks Consensus Estimate of $5.81.
In a year’s time, the stock declined 5%, against the 15.2% rise of the industry it belongs to.
Fourth-quarter adjusted earnings of $1.38 per share beat the Zacks Consensus Estimate by 6 cents and declined nearly 1% on a year-over-year basis. The figure exceeded guidance of $1.30-$1.35. Costs associated with the cybersecurity incident weighed on the bottom line.
Revenues totaled $835.3 million, which lagged the consensus mark by $5 million and fell slightly year over year. The top line was at the lower end of the guidance of $835-$850 million. Weakness in the USIS, International and Global Consumer Solutions segments resulted in year-over-year downside. This was partially offset by strength in the Workforce Solutions segment.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the USIS division grossed $307.4 million, down 2% from the year-ago quarter’s number. Within the division, Online Information Solutions revenues of $211.4 million increased slightly year over year. Mortgage Solutions revenues of $27.3 milliondeclined 17% year over year. Financial Marketing Services revenues came in at $68.7 million, down 1% year over year. The segment contributed 37% to total revenues.
Revenues in the International division totaled $236.4 million, down 3% year over year on a reported basis but up 5% on a constant-currency (cc) basis. On the international front, Equifax reported year-over-year revenue decline of 3% and 14% in Asia-Pacific and Latin, respectively. Revenues in Europe increased 2% year over year. On a local-currency basis, revenues from Asia-Pacific, Europe and Latin America grew 3%, 5% and 8%, respectively. Canada revenues rose 1% year over year on a reported basis and 5% on a local-currency basis. The segment contributed 28% to total revenues.
Revenues in the Workforce Solutions segment totaled at $205.9 million, up 12% from the year-ago quarter’s figure. The improvement includes Verification Services revenues of $145.4 million (up 15% year over year) and Employer Services revenues of $60.5 million (up 6% year over year). Workforce Solutions contributed 25% to total revenues.
Revenues in the Global Consumer Solutions segment amounted to $85.6 million, down 12% year over year on a reported as well as local-currency basis. The segment contributed 10% to total revenues.
Operating Results
Adjusted EBITDA in the fourth quarter fell 5% year over year to $277.6 million. Adjusted EBITDA margin was 33.2% compared with 34.8% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 47.5% compared with 48.5% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 32.4% compared with 28.3% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 48.7% compared with 45.5% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 21.1% compared with 32.4% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited fourth quarter with cash and cash equivalents of $223.6 million, lower than $253.4 million in the prior quarter. Long-term debt at the end of the quarter was $2.6 billion flat with the prior-quarter tally. The company generated $164.8 million of cash from operating activities and spent $113.8 million in capital expenditures. Also, Equifaxpaid dividend of $47.1 million to shareholders in the quarter.
Investors interested in the broader Zacks Business Services sector are keenly awaiting fourth-quarter 2018 earnings reports of key players like Navigant Consulting , FTI Consulting (FCN - Free Report) and ICFI International (ICFI - Free Report) . The companies are slated to announce results on Feb 26.
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Equifax (EFX) Down on Bearish View Despite Q4 Earnings Beat
Equifax Inc. (EFX - Free Report) reported mixed fourth-quarter 2018 results, with earnings beating the zacks consensus estimate and revenues missing the same.
The stock declined 2.9% in the after-hours trading as guidance for the first quarter and 2019 disappointed. Management expects first-quarter 2019 revenues in the range of $840-$855 million, below the Zacks Consensus Estimate of $877 million. Adjusted EPS are anticipated between $1.15 and $1.20, which is below the Zacks Consensus Estimate of $1.40.
For 2019, revenues are expected between $3.425 billion and $3.525 billion, below the Zacks Consensus Estimate of $3.540 billion. Adjusted EPS is anticipated between $5.60 and $5.80, below the Zacks Consensus Estimate of $5.81.
In a year’s time, the stock declined 5%, against the 15.2% rise of the industry it belongs to.
Fourth-quarter adjusted earnings of $1.38 per share beat the Zacks Consensus Estimate by 6 cents and declined nearly 1% on a year-over-year basis. The figure exceeded guidance of $1.30-$1.35. Costs associated with the cybersecurity incident weighed on the bottom line.
Revenues totaled $835.3 million, which lagged the consensus mark by $5 million and fell slightly year over year. The top line was at the lower end of the guidance of $835-$850 million. Weakness in the USIS, International and Global Consumer Solutions segments resulted in year-over-year downside. This was partially offset by strength in the Workforce Solutions segment.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the USIS division grossed $307.4 million, down 2% from the year-ago quarter’s number. Within the division, Online Information Solutions revenues of $211.4 million increased slightly year over year. Mortgage Solutions revenues of $27.3 milliondeclined 17% year over year. Financial Marketing Services revenues came in at $68.7 million, down 1% year over year. The segment contributed 37% to total revenues.
Revenues in the International division totaled $236.4 million, down 3% year over year on a reported basis but up 5% on a constant-currency (cc) basis. On the international front, Equifax reported year-over-year revenue decline of 3% and 14% in Asia-Pacific and Latin, respectively. Revenues in Europe increased 2% year over year. On a local-currency basis, revenues from Asia-Pacific, Europe and Latin America grew 3%, 5% and 8%, respectively. Canada revenues rose 1% year over year on a reported basis and 5% on a local-currency basis. The segment contributed 28% to total revenues.
Revenues in the Workforce Solutions segment totaled at $205.9 million, up 12% from the year-ago quarter’s figure. The improvement includes Verification Services revenues of $145.4 million (up 15% year over year) and Employer Services revenues of $60.5 million (up 6% year over year). Workforce Solutions contributed 25% to total revenues.
Revenues in the Global Consumer Solutions segment amounted to $85.6 million, down 12% year over year on a reported as well as local-currency basis. The segment contributed 10% to total revenues.
Operating Results
Adjusted EBITDA in the fourth quarter fell 5% year over year to $277.6 million. Adjusted EBITDA margin was 33.2% compared with 34.8% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 47.5% compared with 48.5% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 32.4% compared with 28.3% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 48.7% compared with 45.5% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 21.1% compared with 32.4% in the year-ago quarter.
Balance Sheet and Cash Flow
Equifax exited fourth quarter with cash and cash equivalents of $223.6 million, lower than $253.4 million in the prior quarter. Long-term debt at the end of the quarter was $2.6 billion flat with the prior-quarter tally. The company generated $164.8 million of cash from operating activities and spent $113.8 million in capital expenditures. Also, Equifaxpaid dividend of $47.1 million to shareholders in the quarter.
Zacks Rank & Upcoming Releases
Equifax currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are keenly awaiting fourth-quarter 2018 earnings reports of key players like Navigant Consulting , FTI Consulting (FCN - Free Report) and ICFI International (ICFI - Free Report) . The companies are slated to announce results on Feb 26.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>