Post Earnings Coverage as Markit's Quarterly Revenue Surged 54%; Net Income Climbed 46%
Upcoming AWS Coverage on Civeo Post-Earnings Results
LONDON, UK / ACCESSWIRE / April 7, 2017 / Active Wall St. announces its post-earnings coverage on IHS Markit Ltd. (NASDAQ: INFO). The Company reported its updated first quarter fiscal 2017 financial results on March 28, 2017. The financial information services provider missed top- and bottom-line expectations. Register with us now for your free membership at:
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One of IHS Markit's competitors within the Business Services space, Civeo Corp. (NYSE: CVEO), reported on February 23, 2017, its financial and operating results for Q4 and year ended December 31, 2016, as well as subsequent operational and financial updates. AWS will be initiating a research report on Civeo in the coming days.
Today, AWS is promoting its earnings coverage on INFO; touching on CVEO. Get our free coverage by signing up to:
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Earnings Reviewed
For the first quarter ended February 28, 2017, Markit's revenue was $844 million, up 54% compared to revenue of $548.5 million in Q1 FY16, including reported organic revenue growth of 1% and normalized organic revenue growth of 2%. The Company's revenue numbers came in short of analysts' consensus of $844.2 million.
For Q1 FY17, Markit reported earnings of $66 million, up 46% compared to earnings of $45.2 million in Q1 FY16. On a per-share basis, the Company posted earnings of $0.16 per share compared to earnings of $0.19 per share in the year earlier same quarter. Markit's earnings, adjusted for one-time gains and costs, came in at $0.45 per share, falling short of Wall Street's expectations of $0.46 per share.
Operating Performance
For Q1 FY17, Markit's Resources segment's revenue decreased $19 million, or 9% to $197 million, and declined 8% organically for the recurring-based business. For the reported quarter, adjusted EBITDA for Resources decreased $7 million, or 8% to $80 million, due to the shift in timing of the Company's annual CERAWeek conference from Q1 FY16 to Q2 FY17.
During Q1 FY17, Markit's revenue from the Transportation segment increased $25 million, or 13% to $225 million, and included 9% organic growth for the recurring-based business. The Company's adjusted EBITDA for Transportation increased $16 million, or 22% to $90 million.
Markit's Consolidated Markets & Solutions (CMS) decreased $6 million, or 5%, to $127 million for Q1 FY17, and had 1% organic growth for the recurring-based business. The Company's reported quarter adjusted EBITDA for CMS increased $1 million, or 4%, to $29 million.
For Q1 FY17, Markit's revenue for Financial Services was $296 million, and included 7% total organic growth. The Company's reported quarter adjusted EBITDA for Financial Services was $129 million.
Balance Sheet
Markit's Q1 FY17 free cash flow totaled $179 million. The Company's trailing 12-month free cash flow was $542 million and represented a conversion rate of 48%. Trailing 12-month free cash flow includes approximately $170 million of restructuring and acquisition-related cash costs. Excluding these cash costs, conversion would have been approximately 63%.
Markit's quarter-end debt balance was $3.7 billion, which represented a gross leverage ratio of approximately 2.6x on a bank covenant basis. The Company's quarter-end cash balance was $155 million. In the reported quarter, Markit increased its bank credit facility with the addition of a $500 million, 1-year term loan, and we completed a $500 million, 8-year note offering at a 4.75% coupon rate.
In the reported quarter, Markit's repurchased shares worth $592 million, or 15.8 million shares, an average price of $37.50. The share repurchases included $492 million of the Company's $1.2 billion buyback commitment as well as approximately $100 million from stock option proceeds
Outlook
For the year ending November 30, 2017, Markit expects revenue in a range of $3.49 billion to $3.56 billion, including total organic growth of 2% to 4%. The Company's adjusted EBITDA is expected in the range of $1.38 billion to $1.40 billion, and adjusted EPS in a range of $2.02 to $2.08 per diluted share.
Stock Performance
On Thursday, April 06, 2017, the stock closed the trading session at $42.20, marginally up 0.67% from its previous closing price of $41.92. A total volume of 1.53 million shares have exchanged hands. IHS Markit's stock price rallied 16.29% in the last three months, 14.83% in the past six months, and 23.46% in the previous twelve months. Moreover, the stock gained 19.18% since the start of the year. At Thursday's closing price, the stock's net capitalization stands at $17.12 billion.
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