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IHS Markit's (INFO) Q3 Earnings Beat Estimates, Increase Y/Y

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Zacks Equity Research
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IHS Markit Ltd. INFO reported strong third-quarter fiscal 2020 results, with earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings per share of 77 cents beat the consensus mark by 11.6% and increased 15% on a year-over-year basis. Total revenues came in at $1.07 billion, marginally surpassing the consensus mark but declining 4% from the year-ago quarter on a reported basis. Revenues declined 1% organically.

We observe that shares of IHS Markit have gained 19.7% over the past year, outperforming the 1.5% rally of the industry it belongs to.

Quarterly Details

Financial services segment’s revenues increased 4% year over year on a reported as well as organic basis to $446 million. Revenues at the Resources segment totaled $208 million, down 9% year over year on a reported basis as well as organically.

The Transportation segment witnessed year-over-year revenue decline of 5% on a reported basis to reach $243 million. Revenues were flat organically. Revenues at the Consolidated Markets & Solutions segment amounted to $121 million, down 13% year over year on a reported basis and 5% organically.

Recurring fixed revenues of $796.2 million were marginally down year over year on a reported basis and 2% on an organic basis. Recurring variable revenues of $153 million grew 6% year over year on a reported as well as organic basis. Non-recurring revenues totaled $124 million, down 26% year over year on a reported basis and 22% on an organic basis.

Adjusted EBITDA of $486.2 million was up 7% from the year-ago quarter. Adjusted EBITDA margin improved 460 basis points (bps) year over year to 45.3%.

IHS Markit Ltd. Price, Consensus and EPS Surprise

IHS Markit Ltd. Price, Consensus and EPS Surprise
IHS Markit Ltd. Price, Consensus and EPS Surprise

IHS Markit Ltd. price-consensus-eps-surprise-chart | IHS Markit Ltd. Quote

IHS Markit ended the quarter with cash and cash equivalent balance of $156.8 million, compared with $207.8 million in the prior quarter. Long-term debt was $4.7 billion compared with $5.1 billion in the previous quarter.

Cash flow from operations and free cash flow amounted to $402.8 million and $338.6 million, respectively, in the quarter. CapEx was $64.2 million. The company paid out $67.7 million in dividends in the quarter.

Currently, IHS Markit has a Zacks Rank #3 (Hold). 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 keenly awaiting third-quarter 2020 earnings reports of key players like Waste Connections WCN, Waste Management WM and Republic Services RSG. While Waste Connections will release earnings on Oct 28, Waste Management and Republic Services will report the same on Nov 2 and Nov 5, respectively.

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