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Acxiom Beats on Earnings by a Whisker

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Information technology services provider Acxiom Corporation (ACXM - Free Report) reported fourth-quarter fiscal 2013 net income of $13.2 million or 18 cents per share compared with $46.1 million or 58 cents in the year-ago quarter. The year-over-year decrease was primarily due to significant earnings from discontinued operations in fourth quarter fiscal 2012. Excluding one-time items, earnings for the reported quarter were 19 cents per share compared with 22 cents in the year-earlier quarter. The adjusted earnings marginally beat the Zacks Consensus Estimate by a penny.

For fiscal 2013, Acxiom reported net income of $57.6 million or 75 cents per share compared with $77.3 million or 96 cents in fiscal 2012. Excluding one-time items, earnings for the reported fiscal were 76 cents per share compared to 72 cents in the previous fiscal.


Total revenue for fourth quarter fiscal 2013 came in at $277.1 million, down 3.5% year over year and missing the Zacks Consensus Estimate of $287 million. For fiscal 2013, total revenue was $1,099.4 million compared with $1,130.6 million in the prior fiscal, representing a 2.8% year-over-year decrease.

By segments, the Marketing and Data Services segment sales declined 2.9% year over year to $197.5 million in fourth quarter fiscal 2013. IT Infrastructure Management segment revenues dipped 3.5% in the reported quarter to $65.2 million. Revenues from Other Services segment dropped 11.0% year over year to $14.5 million in the reported quarter.


Operating margin for the reported quarter came in at 7.3% versus 7.8% in the year-ago quarter due to lower margins from IT Infrastructure Management and Marketing and Data Services segments.

Marketing and Data Services operating margin was 11% compared to 15% in the previous-year quarter. The IT Infrastructure Management segment reported an operating margin of 4%, down from 9% in the year-ago quarter.

Balance Sheet and Cash Flows

Acxiom ended fiscal 2013 with cash and cash equivalents of $223.0 million, down from $229.6 million at the end of Mar 31, 2012. Long-term debt came in at $237.4 million, down from $251.9 million in fiscal-end 2012.

Net cash provided by operating activities aggregated $74.2 million during the reported quarter compared to $56.4 million in the prior-year period. Free cash flow to equity decreased to $42 million for fourth quarter fiscal 2013, compared with $103 million for the comparable period in the previous fiscal.

Share Repurchase

In the reported quarter, Acxiom repurchased 0.5 million shares for $9 million. Since Aug 2011, the company has repurchased 10.4 million shares for $140 million. Acxiom’s total share repurchase authorization is $200 million.


Concurrent with the earnings release, management provided its guidance for fiscal 2014. For fiscal 2014, management expects both revenues and earnings to remain flat annually. Management is of the opinion that fiscal 2013 was a transition period for the company, wherein it invested considerably for new product innovation and strengthening its client base. Acxiom expects to continue with these initiatives in fiscal 2014, thereby reaping synergistic benefits in the future.

Acxiom currently has a Zacks Rank #3 (Hold). Other stocks in the industry worth reckoning include Unisys Corporation (UIS - Free Report) , carrying a Zacks Rank #1 (Strong Buy), while LifeLock, Inc. and McGraw Hill Financial, Inc. Com carry a Zacks Rank #2 (Buy).

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