Transunion (TRU) Declines 7.1% Since Q3 Earnings Release
TransUnion TRU reported disappointing third-quarter 2023 results wherein earnings and revenues missed the Zacks Consensus Estimate.
Quarterly adjusted earnings of 91 cents per share (adjusting $2.97 cents from non-recurring items) surpassed the consensus mark by 4.2% and decreased 2.2% year over year. Total revenues of $968.7 million missed the consensus mark by 1.4% but increased 3.3% year over year on a reported basis. Revenues were up 3% on a constant-currency basis, mainly driven by strength in international markets.
The stock has declined 7.1% after the disappointing third-quarter results on Oct 24. The company has reduced its 2023 guidance, which has negatively affected the stock. For 2023, it expects revenues to be between $3.794 billion and $3.809 billion, down from the previous guidance of $3.825 billion and $3.885 billion. The guided range lies below the Zacks Consensus Estimate of $3.87 billion.
The company anticipates adjusted earnings per share (EPS) to be $3.24-$3.28, down from the previously guided range of EPS of $3.49-$3.62. The guided range lies below the Zacks Consensus Estimate of $3.59. Adjusted EBITDA is anticipated to be between $1.32 billion and $1.333 billion, down from previously expected $1.388 billion and $1.421 billion.
TransUnion Price, Consensus and EPS Surprise
TransUnion price-consensus-eps-surprise-chart | TransUnion Quote
Revenues by Segments
The U.S. Markets segment’s revenues of $634 million were up 2% year over year but missed our estimate of $636.3 million. Within the segment, Financial Services’ revenues of $323 million showed a slight decrease year over year. Emerging Vertical revenues were $311 million, up 4% on a reported basis.
The International segment’s revenues increased 12% year over year on a reported basis and 11% on a constant-currency basis to $211 million and surpassed our estimate by 6%. Revenues from Canada increased 13% year over year on a reported basis and 17% year over year on a constant-currency basis to $37 million, beating our estimate of $33.6 million.
Revenues from India increased 26% on a reported basis and 31% on a constant-currency basis to $56 million and beat our estimated $55.2 million. Revenues from Asia-Pacific were $22 million, up 13% on a reported basis and 12% on a constant-currency basis, but lagging our estimate of $24 million.
Revenues from Latin America increased 8% on a reported basis and 3% on a constant-currency basis to $31 million and surpassed our estimate by 3.7%. Revenues from Africa decreased 2% on a reported basis but increased 8% on a constant-currency basis to $15 million, missing our estimate by a slight margin. Revenues from the U.K. were $50 million, increasing 3% on a reported basis and decreasing 4% on a constant-currency basis.
The Consumer Interactive segment’s revenues of $143 million declined 3% year over year on a reported basis and missed our estimate by 2.7%.
Operating Performance
Adjusted EBITDA was $356 million, indicating an increase of 5% year over year on a reported basis and 4% on a constant-currency basis and missing our estimated $367.3 million. The adjusted EBITDA margin was 36.8%, up 50 basis points year over year, in comparison with our estimated margin of 37.4%.
Balance Sheet and Cash Flow
TransUnion had $420.9 million in cash and cash equivalents at the end of the quarter compared with $442 million at the end of the prior quarter. Long-term debt was $5.25 billion compared with $5.35 billion in the previous quarter.
Cash generated from operating activities during the quarter was $151 million. Capital expenditure was $69.6 million.
Q4 Outlook
For the fourth quarter of 2023, TransUnion expects revenues to be between $917 million and $932 million. The company anticipates adjusted EPS to be 67-72 cents for the third quarter of 2023. The Zacks Consensus Estimate for the same stands higher at 99 cents. Adjusted EBITDA is anticipated to be between $303 million and $315 million.
TRU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Automatic Data Processing, Inc. ADP reported mixed first-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
ADP’s adjusted EPS of $2.08 beat the consensus estimate by 2.5% and grew 11.8% from the year-ago fiscal quarter’s figure. Total revenues of $4.51 billion missed the consensus estimate by 0.2% but improved 7% from the year-ago fiscal quarter’s reading on a reported basis and 7% on an organic constant-currency basis.
Equifax Inc.EFX reported lower-than-expected third-quarter 2023 results.
Equifax’s adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1% but increasing 1.7% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.7% and increased 6% from the year-ago figure on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc.FI reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
FI’s adjusted EPS (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and increased 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
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