It has been about a month since the last earnings report for IHS Markit . Shares have added about 2.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is IHS Markit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
IHS Markit Q2 Earnings Beat Estimates
IHS Markit reported mixed second-quarter fiscal 2019 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share of 71 cents beat the consensus mark by 6 cents and increased 16.4% on a year-over-year basis. Total revenues came in at $1.14 billion, missing the consensus mark by a slight margin but improving 12.6% from the year-ago quarter.
Quarter Details
Revenues at the Resources segment totaled $249.4 million, up 5% year over year, with recurring revenues rising 4% organically. The Transportation segment experienced year-over-year revenue growth of 8% to reach $318.6 million. Recurring revenues at this segment grew 10% organically.
Revenues at the CMS segment amounted to $134.6 million, down 3% year over year, with no organic growth in recurring revenues. Financial services segment’s revenues increased 29% year over year to $432.9 million with recurring revenues increasing 4% organically.
Recurring fixed revenues of $785.2 million rose 12% year over year on a reported basis and 5% on an organic basis. Recurring variable revenues grew 15% year over year to $145 million. Non-recurring revenues totaled $205.3 million, up 11% year over year on a reported basis and 9% on an organic basis.
Adjusted EBITDA of $465 million increased 16.8% from the year-ago quarter. Adjusted EBITDA margin improved 150 points (bps) year over year to 41%.
IHS Markit ended the quarter with cash and cash equivalent balance of $109.5 million compared with $133.2 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 $424.7 million and $358 million, respectively, in the quarter. The company spent $66.7 million in capex.
Fiscal 2019 Outlook
IHS Markit reiterated its fiscal 2019 guidance. Revenues are expected in the range of $4.425 billion to $4.500 billion, including organic growth of 6% to 7% (including Ipreo). Adjusted EBITDA is expected in the range of $1.75 billion to $1.78 billion. Adjusted EPS is anticipated in the range of $2.52 to $2.57.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, IHS Markit has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, IHS Markit has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Image: Bigstock
IHS Markit (INFO) Up 2.5% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for IHS Markit . Shares have added about 2.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is IHS Markit due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
IHS Markit Q2 Earnings Beat Estimates
IHS Markit reported mixed second-quarter fiscal 2019 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings per share of 71 cents beat the consensus mark by 6 cents and increased 16.4% on a year-over-year basis. Total revenues came in at $1.14 billion, missing the consensus mark by a slight margin but improving 12.6% from the year-ago quarter.
Quarter Details
Revenues at the Resources segment totaled $249.4 million, up 5% year over year, with recurring revenues rising 4% organically. The Transportation segment experienced year-over-year revenue growth of 8% to reach $318.6 million. Recurring revenues at this segment grew 10% organically.
Revenues at the CMS segment amounted to $134.6 million, down 3% year over year, with no organic growth in recurring revenues. Financial services segment’s revenues increased 29% year over year to $432.9 million with recurring revenues increasing 4% organically.
Recurring fixed revenues of $785.2 million rose 12% year over year on a reported basis and 5% on an organic basis. Recurring variable revenues grew 15% year over year to $145 million. Non-recurring revenues totaled $205.3 million, up 11% year over year on a reported basis and 9% on an organic basis.
Adjusted EBITDA of $465 million increased 16.8% from the year-ago quarter. Adjusted EBITDA margin improved 150 points (bps) year over year to 41%.
IHS Markit ended the quarter with cash and cash equivalent balance of $109.5 million compared with $133.2 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 $424.7 million and $358 million, respectively, in the quarter. The company spent $66.7 million in capex.
Fiscal 2019 Outlook
IHS Markit reiterated its fiscal 2019 guidance. Revenues are expected in the range of $4.425 billion to $4.500 billion, including organic growth of 6% to 7% (including Ipreo). Adjusted EBITDA is expected in the range of $1.75 billion to $1.78 billion. Adjusted EPS is anticipated in the range of $2.52 to $2.57.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, IHS Markit has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, IHS Markit has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.