Equifax Inc. reported revenue from continuing operations of $613.4 million in the third quarter of 2014, a 7 percent increase from the third quarter of 2013 and a 8 percent increase in local currency.  

Company Highlights:

  • Local currency fluctuations against the U.S. Dollar negatively impacted the revenue by $5.6 million in the third quarter of 2014. Overall international revenues were buoyed by the acquisition of TDX.
  • The TDX acquisition is turning out to be a great strategic asset. Equifax identified a number of attractive opportunities, which are expected to contribute to strong organic growth in 2015, not just in TDX’s current footprint, but also Equifax’s ability to take that asset to the U.S., Canada and other geographies.  TDX has a small unit in Australia, which may provide Equifax with a foothold for decision support services.
  • Canada:  The recent innovation for data breach services has become a great success. During the quarter, Equifax signed 2 1-year contracts that are expected to contribute over $4 million in revenue.
  • The U.S. mortgage market is unfolding much as anticipated earlier this year.  Equifax believes it is now through the toughest part of the mortgage headwinds, which are expected to abate by 2015.
  • During the third quarter, Equifax signed a multi-year, multi-million dollar agreement to provide online ID proofing services for the US Social Security Administration
  • Identity and Fraud Solutions continue to add strong organic growth within USIS.
  • North American Commercial Solutions has been folded into USIS and partly into International and thus will no longer be reported separately. Rick Smith stated that he is convinced in taking the product offerings and the pipes, which it has in USCIS, the unit will yield good growth going forward, but in the scheme of things the unit is relatively small.

Equifax Q3 2014U.S. Information Solutions (USIS)

Total revenue was $278.6 million in the third quarter of 2014, a 3 percent increase when compared to the third quarter of 2013. Online Information Solutions revenue was $205.5 million, up 4 percent when compared to a year ago.

  • Mortgage Solutions revenue was $28.3 million, flat from a year ago.
  • Financial Marketing Services revenue was $44.8 million, up 2 percent when compared to a year ago.

Operating margin for USIS was 37.4 percent in the third quarter of 2014 compared to 36.2 percent in the third quarter of 2013. Adjusted USIS operating margin, excluding the third quarter 2014 settlement of a legal dispute over certain software license agreements, was 40.3 percent for the third quarter of 2014.

International

Total revenue was $158.4 million in the third quarter of 2014, an 18 percent increase from the third quarter of 2013 and a 22 percent increase on a local currency basis.

  • Latin America revenue was $49.1 million, up 18 percent in local currency and flat in the U.S. dollar from a year ago.
  • Europe revenue was $70.1 million, up 40 percent in local currency and 51 percent in the U.S. dollar from a year ago. European revenue includes the results of TDX Group since the date of its acquisition in the first quarter of 2014.
  • Canada revenue was $39.2 million, up 5 percent in local currency and flat in the U.S. dollar from a year ago.

Operating margin for International was 23.5 percent in the third quarter of 2014 compared to 30.2 percent in the third quarter of 2013 principally reflecting the near-term effect of recent acquisitions.

Workforce Solutions

Total revenue was $122.5 million in the third quarter of 2014, a 6 percent increase when compared to the third quarter of 2013.

  • Verification Services revenue was $75.9 million, up 10 percent when compared to a year ago.
  • Employer Services revenue was $46.6 million, up 1 percent when compared to a year ago.

Operating margin for Workforce Solutions was 32.5 percent in the third quarter of 2014 compared to 29.9 percent in the third quarter of 2013.

North America Personal Solutions

Revenue was $53.9 million, a 3 percent increase from the third quarter of 2013. Operating margin was 31.6 percent compared to 26.3 percent in the third quarter of 2013.

Fourth Quarter 2014 Outlook

Based on the current level of domestic and international business activity, and current trends in foreign exchange rates, consolidated revenue for the fourth quarter of 2014 is expected to be between $615.0 million and $620.0 million and fourth quarter 2014 Adjusted EPS is expected to be between $0.99 and $1.03.

Source:  Equifax Earnings Release