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IHS Markit (INFO) Beats Earnings and Revenue Estimates in Q4

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IHS Markit Ltd. (INFO - Free Report) reported strong fourth-quarter fiscal 2019 results, with earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings per share of 65 cents beat the consensus mark by 6.6% and increased 14% on a year-over-year basis. Total revenues came in at $1.12 billion, surpassing the consensus mark by 0.05% and improving 5% from the year-ago quarter.

We observe that shares of IHS Markit have gained 57.5% over the past year, outperforming 43.4% growth of the industry it belongs to.

Quarterly Details

Revenues at the Resources segment totaled $237.6 million, up 7% year over year, with recurring revenues rising 5% organically. The Transportation segment experienced year-over-year revenue growth of 9% to reach $324.5 million. Recurring revenues at this segment grew 12% organically.

Revenues at the CMS segment amounted to $127.7 million, down 8% year over year, with 1% organic growth in recurring revenues. Financial services segment’s revenues increased 5% year over year to $430.6 million, with 8% organic growth in recurring revenues.

Recurring fixed revenues of $810.1 million rose 6% year over year on a reported basis and 7% on an organic basis. Recurring variable revenues of $147.5 million grew 6% year over year on a reported basis and 7% on an organic basis. Non-recurring revenues totaled $162.8 million, down 2% year over year on a reported basis but up 1% on an organic basis.

Adjusted EBITDA of $452.9 million increased 8.6% from the year-ago quarter. Adjusted EBITDA margin improved 130 points (bps) year over year to 40.4%.

IHS Markit ended the quarter with cash and cash equivalent balance of $111.5 million compared with $124.1 million in the prior quarter. Long-term debt was $4.9 billion compared with $5.1 billion in the previous quarter.

Cash flow from operations and free cash flow amounted to $225.7 million and $147.5 million, respectively, in the quarter. CapEx was $78.2 million. The company repurchased $500 million of shares in fiscal 2019.

Fiscal 2020 Outlook

IHS Markit expects revenues of $4.52 billion to $4.59 billion, including organic growth of 5% to 6%. The Zacks Consensus Estimate for revenues is pegged at $4.41 billion. Adjusted EBITDA is expected in the range of $1.86 billion to $1.89 billion. Adjusted EPS of $2.82 to $2.88 is anticipated. The Zacks Consensus Estimate for earnings is pegged at $2.58.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the broader Zacks Business Services sector are S&P Global (SPGI - Free Report) , Accenture (ACN - Free Report) and Booz Allen Hamilton (BAH - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected EPS (three to five years) growth rate for S&P Global, Accenture and Booz Allen Hamilton is 10%, 10.3% and 13%, respectively.

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