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Verisk Analytics, Inc. VRSK reported disappointing first-quarter 2021 results, with earnings and revenues lagging the Zacks Consensus Estimate.
Adjusted earnings per share of $1.23 missed the consensus mark by 1.6% but rose 5.1% on a year-over-year basis. The upside can be attributed to cost discipline in the business, coronavirus-led reduction in travel expenses and a lower average share count.
Revenues of $726.1 million missed the consensus estimate by 0.3% but increased 5.3% year over year on a reported basis and 3.4% on an organic constant-currency (cc) basis.
Over the past year, shares of Verisk have gained 21.5% compared with 16.8% growth of the industry it belongs to and a 49.6% increase of the Zacks S&P 500 composite.
Insurance segment revenues totaled $535.6 million, up 8.1% year over year on a reported basis and 6% on an organic cc basis.
Within the segment, underwriting and rating revenues of $377.1 million rose 7.7% on a reported basis and 5.3% on an organic cc basis. The upside was primarily driven by an annual increase in prices derived from continued enhancements of the solutions’ contents within the industry-standard insurance programs, sale of expanded solutions to existing customers in commercial and personal lines, and contributions from catastrophe-modeling services and international software solutions. These increases were partially offset by a decrease in certain transactional revenues.
Claims revenues amounted to $158.5 million, improving 9% on a reported basis and 7.9% on an organic cc basis. The top line was positively impacted by repair cost estimating solutions revenues.
Energy and Specialized Markets segment revenues of $156.2 million increased 1.3% year over year on a reported basis but declined 0.6% on an organic cc basis. The uptick can be attributed to contributions from the growth in core research, and environmental health and safety service revenues, which were partially offset by declines in transactional and consulting revenues.
Financial Services segment revenues of $34.3 million declined 15% year over year on a reported basis and 12.8% on an organic cc basis. The segment was weighed down by certain contract transitions, projects that did not reoccur and as a result of the COVID-19 pandemic, lower levels of consulting spending from bank customers.
Adjusted EBITDA of $345.5 million increased 8.7% on a reported basis and 5.2% on an organic cc basis. Adjusted EBITDA margin rose to 47.6% from 46.1% in the prior-year quarter.
Verisk Analytics, Inc. Price, Consensus and EPS Surprise
Verisk Analytics, Inc. price-consensus-eps-surprise-chart | Verisk Analytics, Inc. Quote
Balance Sheet and Cash Flow
Verisk exited first-quarter 2021 with cash and cash equivalents of $390.9 million compared with $218.8 million at the end of the prior quarter. Long-term debt of $2.69 billion remained flat sequentially.
The company generated $448.7 million of cash from operating activities and capex was $59.2 million. Free cash flow was $389.5 million.
Share Repurchases & Dividend Payout
The company paid out a cash dividend of 29 cents per share on Mar 31. On Apr 28, the company's board of directors approved a quarterly cash dividend of 29 cents, payable Jun 30, 2021, to holders of record as of Jun 15, 2021.
During the reported quarter, the company repurchased almost 561,000 shares at an average price of $178.4 per share, for a total cost of $100 million. As of Mar 31, 2021, the company had $478.8 million available under its share repurchase authorization.
Currently, Verisk carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s EFX first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s RHI first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s OMC first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and marginally increased year over year.
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