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TransUnion (TRU) Beats Q1 Earnings & Revenues, 2017 View Up

Supriyo Bose

TransUnion TRU reported first-quarter 2017 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 36 cents. Robust top-line growth, along with productivity improvement initiatives, drove the company’s profits.

The company generated GAAP net income of $62.3 million or 33 cents per share compared with $12.6 million or 7 cents per share in the year-ago period. Strong growth momentum across the USIS and International segments led to the impressive bottom-line performance.

Revenues for the quarter increased 12% year over year to $455 million, comfortably beating the Zacks Consensus Estimate of $444 million. The increase in revenues was driven by growth across the USIS and International segments.

Segmental Details

Revenues at the USIS segment came in at $282 million, up 14% year over year. Decision Services revenues increased 18% from the year-ago quarter to $58 million. Marketing Services revenues were $42 million, an increase of 14% from the prior-year quarter. Online Data Services revenues grew 13% year over year to $182 million.

International segment’s revenues rose 23% year over year to $83 million. On a constant currency basis, revenues grew an impressive 16%. Revenues from developed markets increased 21% (18% on a constant currency basis) to $28 million, while that from emerging markets went up 24% (15% on a constant currency basis) to $55 million. The company saw 4% growth in revenues from acquisitions in this segment.

Revenues at the Consumer Interactive segment came in at $105 million, down 1% year over year.

Margins

Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $171.6 million compared with $141.4 million in the prior-year quarter. Adjusted EBITDA margin was 37.7%, compared with 34.8% in the year-ago quarter.

The USIS segment’s adjusted operating income was $99 million, an increase of 28% from the prior-year quarter. The rise was driven by growth in the top line. The International segment’s adjusted operating income was $24 million, an increase of 43% (36% on a constant currency basis), driven by strong revenue growth and cost reduction. The Consumer Interactive segment’s adjusted operating was $50 million, an increase of 18% year over year.

TransUnion Price, Consensus and EPS Surprise

 

TransUnion Price, Consensus and EPS Surprise | TransUnion Quote

Balance Sheet and Cash Flow

As of Mar 31, 2017, TransUnion had cash and cash equivalents of $131.2 million, while long-term debt was $2,309.3 million. Cash flow from operating activities was $67.3 million for the reported quarter compared with $41.7 million in the year-earlier quarter.

Guidance Up

With double digit growth in revenues and adjusted earnings on diligent execution of operational plans, the company increased its earlier guidance for full-year 2017. Consolidated revenues for the full year are expected to be between $1.845 billion and $1.86 billion (a year-over-year increase of 8–9% on constant currency basis), up from $1.835 billion and $1.85 billion expected earlier. Adjusted EPS is expected to be between $1.74 and $1.79, compared with earlier projections in the range of $1.71 and $1.76. This represents year-over-year growth of 16–19%, up from 14–17% expected earlier.

For the second quarter, consolidated revenues are expected to be between $460 million and $465 million. Adjusted EBITDA is expected to be in the range of $176–$180 million. Adjusted EPS is expected to be between 42 cents and 43 cents, an increase of 14–17%.

TransUnion currently carries a Zacks Rank #3 (Hold). Some other better-ranked stocks in the same space include S&P Global, Inc. SPGI, Ebix, Inc. EBIX and LogMeIn, Inc. LOGM. While S&P Global carries a Zacks Rank #2 (Buy), EBIX and LogMein sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

S&P Global has an impressive long-term earnings growth expectation of 12.3%.

EBIX has a healthy long-term earnings growth expectation of 10%.

LogMein has an impressive long-term earnings growth expectation of 22.5%.

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