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Adjusted earnings of $1.87 per share beat the Zacks Consensus Estimate by 16.2% and improved 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.
Revenues of $1.07 billion outpaced the consensus estimate by 5.9% and improved 22% year over year on a reported basis as well as on a local-currency basis. The reported figure exceeded the guided range of $930-$950 million.
So far this year, shares of Equifax have gained 15.9%, compared with 2.2% growth of the industry it belongs to and 7% increase of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the U.S. Information Solutions division came in at $386.3 million, up 22% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $284.7 million were up 22% year over year on a reported basis and 15% on an adjusted basis. Mortgage Solutions’ revenues of $55.4 million improved 51% year over year. Financial Marketing Services’ revenues came in at $46.2 million, up 1% year over year on a reported basis but down 9% on an adjusted basis. The segment contributed 36% of total revenues.
Revenues in the International division totaled $218 million, down 5% year over year on both reported and local-currency basis. Asia Pacific revenues of $80.2 million grew 4% year over year on a reported basis but were flat on a local-currency basis. Revenues from Europe came in at $58.7 million, down 9% year over year on a reported basis and 13% on a local-currency basis. Latin America revenues of $40.4 million declined 18% year over year on a reported basis and 6% on a local-currency basis. Canada revenues of $38.7 million declined 1% year over year on a reported basis and were flat on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $376.8 million, up 57% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $301.1 million were up 63% year over year. Employer Services revenues of $75.7 million were up 37% year over year. Workforce Solutions contributed 35% of total revenues.
Revenues in the Global Consumer Solutions segment amounted to $87.2 million, down 2% year over year on both reported and local-currency basis. The segment contributed 8% of total revenues.
Operating Results
Adjusted EBITDA in the third quarter of 2020 came in at $353.2 million compared with $296.2 million in the year-ago quarter. Adjusted EBITDA margin rose to 36.6% from 33.9% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 46% compared with 44% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 32.3% compared with 30.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 57.8% compared with 48.8% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 24.8% compared with 24.9% in the year-ago quarter.
Equifax exited third-quarter 2020 with cash and cash equivalents of $1.54 billion compared with $1.35 billion at the end of the prior quarter. Long-term debt was $3.28 billion compared with $3.87 billion at the end of the prior quarter.
The company generated $367 million of cash from operating activities and capex was $116.7 million. Also, Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.
Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2020 earnings of key players like S&P Global (SPGI - Free Report) , Fiserv and Waste Connections (WCN - Free Report) . While S&P Global and Fiserv are slated to release their results on Oct 27, Waste Connections is scheduled to release the same on Oct 28.
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Equifax (EFX) Surpasses Q3 Earnings & Revenue Estimates
Equifax Inc. (EFX - Free Report) reported better-than-expected third-quarter 2020 results.
Adjusted earnings of $1.87 per share beat the Zacks Consensus Estimate by 16.2% and improved 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.
Revenues of $1.07 billion outpaced the consensus estimate by 5.9% and improved 22% year over year on a reported basis as well as on a local-currency basis. The reported figure exceeded the guided range of $930-$950 million.
So far this year, shares of Equifax have gained 15.9%, compared with 2.2% growth of the industry it belongs to and 7% increase of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Segmental Revenues
Revenues in the U.S. Information Solutions division came in at $386.3 million, up 22% from the year-ago quarter. Within the division, Online Information Solutions’ revenues of $284.7 million were up 22% year over year on a reported basis and 15% on an adjusted basis. Mortgage Solutions’ revenues of $55.4 million improved 51% year over year. Financial Marketing Services’ revenues came in at $46.2 million, up 1% year over year on a reported basis but down 9% on an adjusted basis. The segment contributed 36% of total revenues.
Revenues in the International division totaled $218 million, down 5% year over year on both reported and local-currency basis. Asia Pacific revenues of $80.2 million grew 4% year over year on a reported basis but were flat on a local-currency basis. Revenues from Europe came in at $58.7 million, down 9% year over year on a reported basis and 13% on a local-currency basis. Latin America revenues of $40.4 million declined 18% year over year on a reported basis and 6% on a local-currency basis. Canada revenues of $38.7 million declined 1% year over year on a reported basis and were flat on a local-currency basis.
Revenues in the Workforce Solutions segment totaled $376.8 million, up 57% from the year-ago quarter’s figure. Within the segment, Verification Services’ revenues of $301.1 million were up 63% year over year. Employer Services revenues of $75.7 million were up 37% year over year. Workforce Solutions contributed 35% of total revenues.
Revenues in the Global Consumer Solutions segment amounted to $87.2 million, down 2% year over year on both reported and local-currency basis. The segment contributed 8% of total revenues.
Operating Results
Adjusted EBITDA in the third quarter of 2020 came in at $353.2 million compared with $296.2 million in the year-ago quarter. Adjusted EBITDA margin rose to 36.6% from 33.9% in the year-ago quarter.
Adjusted EBITDA margin for USIS was 46% compared with 44% in the year-ago quarter. Adjusted EBITDA margin for the International segment was 32.3% compared with 30.9% in the prior-year quarter. Workforce Solutions’ adjusted EBITDA margin was 57.8% compared with 48.8% a year ago. Adjusted EBITDA margin for Global Consumer Solutions was 24.8% compared with 24.9% in the year-ago quarter.
Equifax, Inc. Price, Consensus and EPS Surprise
Equifax, Inc. price-consensus-eps-surprise-chart | Equifax, Inc. Quote
Balance Sheet and Cash Flow
Equifax exited third-quarter 2020 with cash and cash equivalents of $1.54 billion compared with $1.35 billion at the end of the prior quarter. Long-term debt was $3.28 billion compared with $3.87 billion at the end of the prior quarter.
The company generated $367 million of cash from operating activities and capex was $116.7 million. Also, Equifax paid out dividends of $47.5 million to shareholders in the reported quarter.
Currently, Equifax carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2020 earnings of key players like S&P Global (SPGI - Free Report) , Fiserv and Waste Connections (WCN - Free Report) . While S&P Global and Fiserv are slated to release their results on Oct 27, Waste Connections is scheduled to release the same on Oct 28.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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