Equifax Inc. (NYSE:EFX) reported revenue from continuing operations of $578.5 million in the fourth quarter of 2013, an 8 percent increase from the fourth quarter of 2012.  On a non-GAAP basis, adjusted revenue, excluding the impact of the collection of certain reserved 2012 billings, was $571.3 million for the quarter, a 7 percent increase from the fourth quarter of 2012 and an 8 percent increase in local currency.

Equifax Q4 2013 Full Year SegmentsFor the full year 2013, revenue was $2.3 billion, an 11 percent increase from 2012, both on a GAAP and adjusted basis. Diluted EPS from continuing operations attributable to Equifax was $2.69, a 24 percent increase from $2.18 for the full year 2012. On a non-GAAP basis, full year adjusted EPS from continuing operations attributable to Equifax was $3.60, up 24 percent from the prior year period; this financial measure excludes the same items as those in the fourth quarter of both 2013 and 2012.

Q4 Segments ResultsEquifax Q4 2013 Full Year B

U.S. Consumer Information Solutions (USCIS)

Total revenue was $255.5 million in the fourth quarter of 2013 compared to $221.6 million in the fourth quarter of 2012, an increase of 15 percent. On a non-GAAP basis, adjusted USCIS revenue, excluding the collection of certain reserved 2012 billings, was $248.3 million, an increase of 12 percent compared to the fourth quarter of 2012.

  • Online Consumer Information Solutions revenue was $170.1 million, up 12 percent from a year ago.
  • Mortgage Solutions revenue was $23.8 million, down 1 percent from a year ago.
  • Consumer Financial Marketing Services (CFMS) revenue was $61.6 million, up 36 percent when compared to a year ago. CFMS revenue adjusted for the collection of certain reserved 2012 billings, on a non-GAAP basis, was $54.4 million, an increase of 20 percent when compared to the prior year quarter.

Operating margin for USCIS was 41.4 percent in the fourth quarter of 2013 compared to 39.8 percent in the fourth quarter of 2012. Adjusted USCIS operating margin, excluding the impact of the collection of certain reserved 2012 billings, was 39.7 percent for the fourth quarter of 2013.

International

Total revenue was $131.5 million in the fourth quarter of 2013, a 6 percent increase from the fourth quarter of 2012 and an 11 percent increase on a local currency basis.

  • Latin America revenue was $50.2 million, up 18 percent in local currency and 5 percent in U.S. dollars from a year ago.
  • Europe revenue was $49.8 million, up 12 percent in local currency and 15 percent in U.S. dollars from a year ago.
  • Canada Consumer revenue was $31.5 million, up 1 percent in local currency and down 5 percent in U.S. dollars from a year ago.

Operating margin for International was 28.6 percent in the fourth quarter of 2013 compared to 29.9 percent in the fourth quarter of 2012.

Workforce Solutions

Total revenue was $112.2 million in the fourth quarter of 2013, flat when compared to the fourth quarter of 2012.

  • Verification Services revenue was $65.1 million, down 7 percent when compared to a year ago. Mortgage-related verification revenue was down 32 percent when compared to a year ago.
  • Employer Services revenue was $47.1 million, up 12 percent when compared to a year ago.

Operating margin for Workforce Solutions was 28.9 percent in the fourth quarter of 2013 compared to 22.6 percent in the fourth quarter of 2012.

North America Personal Solutions

Revenue was $52.5 million, a 9 percent increase from the fourth quarter of 2012. Operating margin was 30.7 percent compared to 28.2 percent in the fourth quarter of 2012.

North America Commercial Solutions

Revenue was $26.8 million, down 3 percent in U.S. dollars and 2 percent in local currency compared to the fourth quarter of 2012. Operating margin was 32.5 percent compared to 34.4 percent in the fourth quarter of 2012.

Full Year 2014 and First Quarter 2014 Outlook

Based on the current level of domestic and international business activity, current trends in foreign exchange rates, and an anticipated slowdown in mortgage activity in the first half of 2014, consolidated revenue for the full year of 2014 is expected to be between $2.425 billion and $2.475 billion and full year 2014 Adjusted EPS is expected to be between $3.75 and $3.89.

For the first quarter of 2014, consolidated revenue is expected to be between $575 million and $588 million and first quarter 2014 Adjusted EPS is expected to be between $0.84 and $0.88.

Recent Acquisitions:

Following the acquisition of the UK based TDX, which offers end to end risk management solutions, Equifax has announce two more acquisitions in the same space:

  • Equifax acquired Inffinix, a Mexico City-based credit data software company, which gives Equifax a footprint in Mexico and other parts of Latin America, including Brazil and Peru.   About Infffinix:  Since its foundation, in 1995, Inffinix has contributed to increase the profitability of customer’s credit portfolios by collecting more, faster and with less cost.  Its customers are leading companies, in several markets around the globe.  Integral Collections is the vision that Inffinix had in mind when it designed CyberFinancial.  To develop an Integral Collections application means that one has to study and automate each activity that is performed by a professional collector.  The end result of this is: CyberFinancial.  A system in the market that’s designed for Integral Collections.
  • Equifax also acquired Forseva, LLC a Chicago based leading provider of end-to-end, cloud-based credit and collections management solutions.   The company will become a part of Equifax Commercial Information Solutions.  For details go to https://2018.biia.com/equifax-acquires-chicago-based-forseva-llc

What Wall Street Thought Prior to Q4 Earnings Release:   “Equifax posted mixed third-quarter results with the bottom line beating the Zacks Consensus Estimate but the top line missing the same. Nonetheless, the company’s revenues increased on a year-over-year basis aided by strong growth across its business segments.

Equifax Stock Chart Feb 14 2014Equifax’s focus on product innovation, broadening of data assets through acquisitions and continued share gains in North America are encouraging.  Some analysts believe Equifax is well positioned to benefit from its leadership in important markets and strength in international markets.”

However following Equifax’s Earnings Call the stock dropped sharply.   Therefore does Wall Street believe the Growth Bonanza is over?

Source:  Equifax Earnings Release and Nasdaq.com