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Equifax (EFX) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

Equifax Inc. EFX is likely to witness earnings and revenue decline when it reports second-quarter 2019 results.

So far this year, shares of Equifax have gained 47.4% compared with 40.9% rise of the industry it belongs to and 17.2% increase of the Zacks S&P 500 composite.

 

Expectations in Detail

Equifax’s top line is likely to be weighed down by weakness in the USIS, International and Global Consumer Solutions segments, which is likely to be partially offset by strength in the Workforce Solutions segment.

The Zacks Consensus Estimate for second-quarter 2019 revenues stands at $871.75 million, indicating a decline of 0.6% from the year-ago period reported figure. The consensus estimate lies within the company guided range of $865-$880 million. In first-quarter 2019, total revenues of $846.1 million fell 2% year over year.

Segment-wise, the consensus mark for U.S. Information Solutions (USIS) segment revenues is pegged at $322 million, indicating decline of 0.9% from the year-ago reported figure. Weakness across the U.S. mortgage market is expected to hurt results.

The consensus estimate for International segment revenues is pegged at $237 million, indicating a decline of 5.2% from the year-ago reported figure. The expected downfall is likely to be due to weak consumer and commercial lending markets in Australia and weak economic conditions in Argentina.

The consensus mark for Global Consumer Solutions segment revenues is pegged at $88 million, indicating a decline of 6.4% from the year-ago reported figure. The downside could be due to declining revenues across the company’s U.S. consumer direct business.

The consensus estimate for Workforce Solutions segment revenues is pegged at $225 million, indicating growth of 8.2% from the year-ago reported figure. Strength across verification services should boost the segment revenues.

Equifax’s bottom line is expected to be hurt by costs associated with the cybersecurity incident. The Zacks Consensus Estimate for earnings per share in the to-be reported quarter is pegged at $1.36, indicating a decline of 12.8% from the year-ago reported figure. Notably, the consensus estimate lies within the guided adjusted EPS range of $1.32-$1.37.

In first-quarter 2019, adjusted earnings of $1.20 per share decreased 16% year over year.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP . Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Equifax has a Zacks Rank #3 and an Earnings ESP of 0.00%, a combination that makes surprise prediction difficult.

Equifax, Inc. Price and EPS Surprise

 

Equifax, Inc. Price and EPS Surprise

Equifax, Inc. price-eps-surprise | Equifax, Inc. Quote

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on second-quarter 2019 earnings:

S&P Global SPGI has an Earnings ESP of +0.94% and a Zacks Rank #2.  The company is slated to report results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

IQVIA Holdings IQV has an Earnings ESP of +1.12% and a Zacks Rank #3. The company is slated to release results on Jul 24.

Fiserv FISV has an Earnings ESP of +0.79% and a Zacks Rank #3. The company is slated to report results on Jul 25.

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