Equifax Inc. Earnings: Five Quarters in a Row of Expanding Margins, Net Income Climbs

S&P 500 (NYSE:SPY) component Equifax Inc. (NYSE:EFX) reported its results for the fourth quarter. Equifax provides information solutions, employment and income verification, and human resources business process outsourcing services.

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Equifax Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the credit services company rose to $74.7 million (61 cents per share) vs. $62.2 million (50 cents per share) in the same quarter a year earlier. This marks a rise of 20.1% from the year earlier quarter.

Revenue: Rose 5.7% to $509.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Equifax Inc. reported adjusted net income of 68 cents per share. By that measure, the company beat the mean estimate of 67 cents per share. Analysts were expecting revenue of $501.5 million.

Quoting Management: “I am very proud of our fourth quarter performance which topped off a year of significant accomplishments including strong execution on our core growth initiatives, which resulted in acceleration of our organic non-mortgage revenue growth. We continue to diversify our served markets and customers through the rapid deployment of many new products. New products have resulted in an expansion of our markets as well as share gains within our current customer base. We are also becoming well positioned for long-term growth in Brazil through our successful partnership with Boa Vista Servicos,” said Richard F. Smith, Equifax’s Chairman and Chief Executive Officer. “In 2012, there will be new opportunities that will drive our business performance. You can expect this management team to continue building on its accomplishments to further enhance long term revenue growth and operating margin.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded two percentage points to 61.9% from the year earlier quarter. Over that span, margins have grown on average 1.9 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 3.5% to $490.4 million in the third quarter. The figure rose 5.7% in the second quarter from the year earlier and climbed 2.4% in the first quarter from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by one cent in the third quarter and by one cent in the second quarter.

Last quarter’s profit increase breaks a streak of two consecutive quarters of year-over-year profit decreases. In the third quarter, net income fell 12.8% while the figure dropped in the second quarter.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the first quarter of the next fiscal year is 65 cents per share, up from 64 cents ninety days ago. For the fiscal year, the average estimate has been unchanged at $2.52 a share.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com