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Verisk (VRSK) Beats Q1 Earnings and Revenue Estimates
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Verisk Analytics, Inc.(VRSK - Free Report) reported solid first-quarter 2020 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
Adjusted earnings per share of $1.17 beat the consensus mark by 2.6% and rose 13.6% on a year-over-year basis. The upside can be attributed to organic growth in the business and lower average share count.
Revenues of $689.8 million beat the consensus estimate by 0.6% and increased 10.4% year over year on a reported basis and 5% on an organic constant-currency (cc) basis.
So far this year, shares of Verisk have gained 5.6% against 3.2% decline of the industry it belongs to and 11.8% fall of the Zacks S&P 500 composite.
Segmental Performance
Insurance segment revenues totaled $344.1 million, up 12.5% year over year on a reported basis and 8.4% in organic cc.
Within the segment, underwriting and rating revenues of $489.4 million rose 7.9% on a reported basis and 4.9% in organic cc. The upside was primarily driven byrise in prices derived from continued enhancements to the content of the solutions within industry-standard insurance programs, sale of expanded solutions to existing customers in commercial and personal lines as well as contributions from catastrophe modeling services.
Claims revenues amounted to $145.3 million, which declined 1.6% on a reported basis but inched up 0.4% in organic cc. The top line was negativelyimpacted by the injunction ruling against roof measurement solutions, which were partially offset by claims analytics revenues and repair cost estimating solutions revenues.
Energy and Specialized Markets segment revenues amounted to $160.1 million and increased 24.6% year over year on a reported basis and 2.6% in organic cc. The uptick can be attributed to growth in core research, increases in environmental health and safety service revenues as well as weather analytics revenues. These were partially offset by a decline in market and cost intelligence solutions due to implementation projects that did not reoccur as well as downfall in consulting revenues.
Financial Services segment revenues of $40.3 million declined 6.4% year over year on a reported basis but improved 3% in organic cc. Impact of portfolio transactions, which were closed in the quarter, led to decline in reported revenues. Revenue growth on an OCC basis was driven by rise in management information and regulatory reporting as well as fraud and credit risk, partially offset by downfall in portfolio management and spend-informed analytics.
Operating Results
Adjusted EBITDA of $318 million increased 9% on a reported basis and 7.4% in organic cc. Adjusted EBITDA margin came in at 46.1% compared with 46.7% in the prior-year quarter.
Operating income was $252.3 million compared with $202.4 million in the prior-year quarter. Operating margin rose to 36.6% from 32.3% in the year-ago quarter.
Verisk Analytics, Inc. Price, Consensus and EPS Surprise
Verisk exited first-quarter 2020 with cash and cash equivalents of $204.4 million compared with $184.6 million at the end of the prior quarter. Long-term debt of $2.65 billion was flat with prior-quarter's figure.
The company generated $362.6 million of cash from operating activities and capex was $52.9 million. Free cash flow was $309.7 million.
Share Repurchases & Dividend Payout
During the reported quarter, Verisk returned $218 million to shareholders through dividend payouts and repurchases
During the first quarter, the company repurchased nearly 1.1 million shares at an average price of $154.56 for a total cost of $174 million. As of Mar 31, the company had $454 million available under its share repurchase authorization.
The company paid out a cash dividend of 27 cents per share on Mar 31. On Apr 29, the company's board of directors approved a quarterly cash dividend of 27 cents, payable on Jun 30, to shareholders of record as of Jun 15.
S&P Global Inc. (SPGI - Free Report) first-quarter 2020 adjusted earnings per share of $2.73 beat the consensus mark by 15.7% and improved 29.4% year over year on the back of revenue growth, benefits of productivity initiatives and reduced business travel.
IQVIA Holdings Inc. (IQV - Free Report) first-quarter 2020 adjusted earnings per share of $1.50 beat the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure lies within the guided range of $1.46-$1.51
Insperity, Inc. (NSP - Free Report) first-quarter 2020 adjusted earnings of $1.70 per share beat the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher end of the guided range of $1.61-$1.70.
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Verisk (VRSK) Beats Q1 Earnings and Revenue Estimates
Verisk Analytics, Inc.(VRSK - Free Report) reported solid first-quarter 2020 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
Adjusted earnings per share of $1.17 beat the consensus mark by 2.6% and rose 13.6% on a year-over-year basis. The upside can be attributed to organic growth in the business and lower average share count.
Revenues of $689.8 million beat the consensus estimate by 0.6% and increased 10.4% year over year on a reported basis and 5% on an organic constant-currency (cc) basis.
So far this year, shares of Verisk have gained 5.6% against 3.2% decline of the industry it belongs to and 11.8% fall of the Zacks S&P 500 composite.
Segmental Performance
Insurance segment revenues totaled $344.1 million, up 12.5% year over year on a reported basis and 8.4% in organic cc.
Within the segment, underwriting and rating revenues of $489.4 million rose 7.9% on a reported basis and 4.9% in organic cc. The upside was primarily driven byrise in prices derived from continued enhancements to the content of the solutions within industry-standard insurance programs, sale of expanded solutions to existing customers in commercial and personal lines as well as contributions from catastrophe modeling services.
Claims revenues amounted to $145.3 million, which declined 1.6% on a reported basis but inched up 0.4% in organic cc. The top line was negativelyimpacted by the injunction ruling against roof measurement solutions, which were partially offset by claims analytics revenues and repair cost estimating solutions revenues.
Energy and Specialized Markets segment revenues amounted to $160.1 million and increased 24.6% year over year on a reported basis and 2.6% in organic cc. The uptick can be attributed to growth in core research, increases in environmental health and safety service revenues as well as weather analytics revenues. These were partially offset by a decline in market and cost intelligence solutions due to implementation projects that did not reoccur as well as downfall in consulting revenues.
Financial Services segment revenues of $40.3 million declined 6.4% year over year on a reported basis but improved 3% in organic cc. Impact of portfolio transactions, which were closed in the quarter, led to decline in reported revenues. Revenue growth on an OCC basis was driven by rise in management information and regulatory reporting as well as fraud and credit risk, partially offset by downfall in portfolio management and spend-informed analytics.
Operating Results
Adjusted EBITDA of $318 million increased 9% on a reported basis and 7.4% in organic cc. Adjusted EBITDA margin came in at 46.1% compared with 46.7% in the prior-year quarter.
Operating income was $252.3 million compared with $202.4 million in the prior-year quarter. Operating margin rose to 36.6% from 32.3% in the year-ago quarter.
Verisk Analytics, Inc. Price, Consensus and EPS Surprise
Verisk Analytics, Inc. price-consensus-eps-surprise-chart | Verisk Analytics, Inc. Quote
Balance Sheet and Cash Flow
Verisk exited first-quarter 2020 with cash and cash equivalents of $204.4 million compared with $184.6 million at the end of the prior quarter. Long-term debt of $2.65 billion was flat with prior-quarter's figure.
The company generated $362.6 million of cash from operating activities and capex was $52.9 million. Free cash flow was $309.7 million.
Share Repurchases & Dividend Payout
During the reported quarter, Verisk returned $218 million to shareholders through dividend payouts and repurchases
During the first quarter, the company repurchased nearly 1.1 million shares at an average price of $154.56 for a total cost of $174 million. As of Mar 31, the company had $454 million available under its share repurchase authorization.
The company paid out a cash dividend of 27 cents per share on Mar 31. On Apr 29, the company's board of directors approved a quarterly cash dividend of 27 cents, payable on Jun 30, to shareholders of record as of Jun 15.
Currently, Verisk carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
S&P Global Inc. (SPGI - Free Report) first-quarter 2020 adjusted earnings per share of $2.73 beat the consensus mark by 15.7% and improved 29.4% year over year on the back of revenue growth, benefits of productivity initiatives and reduced business travel.
IQVIA Holdings Inc. (IQV - Free Report) first-quarter 2020 adjusted earnings per share of $1.50 beat the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure lies within the guided range of $1.46-$1.51
Insperity, Inc. (NSP - Free Report) first-quarter 2020 adjusted earnings of $1.70 per share beat the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher end of the guided range of $1.61-$1.70.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>