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Verisk's (VRSK) Q1 Earnings Miss Estimates, Increase Y/Y

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Verisk Analytics, Inc. VRSK reported mixed first-quarter 2022 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same.

Adjusted earnings per share (excluding $1.79 from non-recurring items) of $1.34 missed the consensus mark by 3.6% but grew 8.9% on a year-over-year basis. The upside was backed by organic growth within the business, lower interest expenses and a lower average share count.

Revenues of $775.5 million beat the consensus estimate by 0.7% and increased 6.8% year over year on a reported basis and 5.3% on an organic constant-currency (cc) basis.

Over the past year, shares of Verisk have improved 16% against an 18.1% decline of the industry it belongs to.

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Segmental Performance

Insurance segment revenues totaled $586.4 million, up 9.5% year over year on a reported basis and 6.1% on an organic cc basis.

Within the segment, underwriting and rating revenues of $416 million rose 10.3% on a reported basis and 6.4% 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 and the sale of expanded solutions to existing customers in commercial and personal lines.

Claims revenues amounted to $170.4 million, improving 7.5% on a reported basis and 5.3% on an organic cc basis. The top line was primarily driven by claims analytics revenues and property estimating solutions.

Verisk Analytics, Inc. Price, Consensus and EPS Surprise

Verisk Analytics, Inc. Price, Consensus and EPS Surprise
Verisk Analytics, Inc. Price, Consensus and EPS Surprise

Verisk Analytics, Inc. price-consensus-eps-surprise-chart | Verisk Analytics, Inc. Quote

Energy and Specialized Markets segment’s revenues of $154.3 million decreased 1.2% year over year on a reported basis but increased 1.9% on an organic cc basis. The uptick in organic cc basis was primarily driven by subscription and consulting revenues.

Financial Services segment’s revenues of $34.8 million grew 1.6% year over year. The segment’s growth was primarily on portfolio management and spend informed analytics, offset by lower bankruptcy volumes.

Operating Results

Adjusted EBITDA of $359.3 million increased 4% on a reported basis and 4.1% on an organic cc basis. Adjusted EBITDA margin fell to 46.3% from 47.6% in the prior-year quarter.

Balance Sheet and Cash Flow

Verisk exited first-quarter 2022 with cash and cash equivalents of $397.9 million compared with $280.3 million at the end of the prior-year quarter. Long-term debt was $2.34 billion, flat with the prior-year quarter’s level.

Verisk generated $399.6 million of cash from operating activities while capex was $60 million. Free cash flow was $339.6 million.

Share Repurchase & Dividend Payout

During the March quarter, Verisk paid out a total cash dividend of $49.4 million.

In the reported quarter, VRSK bought back approximately 3,053 thousand shares at an average price of $187.17 for a total cost of $571.3 million for the first quarter of 2022. As of Mar 31, 2022, VRSK had $1,032.5 million remaining under the share repurchase authorization.

Currently, Verisk carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshots

Within the broader Business Services sector, ManpowerGroup Inc. MAN, Omnicom Group Inc. OMC and Equifax Inc. EFX recently reported first-quarter 2022 results.

ManpowerGroup reported impressive first-quarter 2022 results, with both earnings and revenues beating the Zacks Consensus Estimate. Quarterly adjusted earnings of $1.88 per share beat the consensus mark by 20.5% and improved 69.4% year over year. Revenues of $5.14 billion surpassed the consensus mark by 0.7% and inched up 4.5% year over year on a reported basis and 9.8% on a constant-currency (cc) basis.

Omnicom reported impressive first-quarter 2022 results as both earnings and revenues surpassed the Zacks Consensus Estimate. Earnings of $1.39 per share beat the consensus mark by 8.6% and increased 4.5% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 5.4% but declined slightly year over year.

Equifax reported better-than-expected first-quarter 2022 results. Adjusted earnings of $2.22 per share beat the Zacks Consensus Estimate by 3.3% and improved 13% on a year-over-year basis. Revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year on a reported basis and 13% on a local-currency basis.


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