Earning Reports Q4 2012As reported in an earlier post Equifax Inc. (NYSE: EFX) announced financial results for the quarter and full year ended December 31, 2012.  Total revenues grew by 10% to US$2,160.5 million (9% in Q4).  As compared to previously reported earnings releases of its peer group, Equifax is performing quite well.

Fourth Quarter 2012 Highlights:

On December 28, 2012, the company completed the acquisition of certain business assets and the operations of CSC Credit Services, Inc., a subsidiary of Computer Sciences Corporation, for $1.0 billion. The results of this acquisition have been included in the U.S. Consumer Information Solutions segment subsequent to the December 28th date of acquisition and are not material for the fourth quarter of 2012.  This acquisition was funded by the proceeds of $500 million in 10-year bonds issued in 2012, commercial paper and cash on hand.

Operating margin was 17.0 percent for the fourth quarter of 2012, compared to 24.7 percent in the fourth quarter of 2011. On a non-GAAP basis, adjusted operating margin, which excludes transaction-related expenses associated with the acquisition of CSC Credit Services and the pension settlement, was 24.9 percent for the fourth quarter of 2012, up 20 basis points from 2011.

Subsequent to year end, Equifax disposed two small, non-strategic business units, Equifax Settlement Services and Talent Management Services.

U.S. Consumer Information Solutions (USCIS)

Total revenue was $235.7 million in the fourth quarter of 2012 compared to $215.6 million in the fourth quarter of 2011, an increase of 9 percent.

Online Consumer Information Solutions revenue was $147.7 million, up 8 percent from a year ago. Mortgage Solutions revenue was $42.7 million, up 28 percent from a year ago. Consumer Financial Marketing Services revenue was $45.3 million, down 1 percent when compared to a year ago.

Operating margin for USCIS was 37.4 percent in the fourth quarter of 2012 compared to 37.5 percent in the fourth quarter of 2011.

For the full year revenues grew by 16% to US$916.8 million. 

International Operations

Total revenue was $124.7 million in the fourth quarter of 2012, a 7 percent increase in both U.S. dollars and local currency from the fourth quarter of 2011.

Latin America revenue was $47.9 million, up 9 percent in local currency and 8 percent in U.S. dollars from a year ago. Europe revenue was $43.6 million, up 3 percent in local currency and 4 percent in U.S. dollars from a year ago. Canada Consumer revenue was $33.2 million, up 7 percent in local currency and 10 percent in U.S. dollars from a year ago.

Operating margin for International was 29.8 percent in the fourth quarter of 2012 compared to 28.7 percent in the fourth quarter of 2011.

2012 full year revenues declined by 1% to US$486.2 million.

Workforce Solutions

Total revenue was $117.2 million in the fourth quarter of 2012, an 11 percent increase over the fourth quarter of 2011.

Verification Services revenue was $69.6 million, up 27 percent when compared to a year ago. Employer Services revenue was $47.6 million, down 6 percent when compared to a year ago.

Operating margin for Workforce Solutions was 22.4 percent in the fourth quarter of 2012 compared to 23.2 percent in the fourth quarter of 2011.

2012 total year revenues grew by 15% to US$463.1 million.

North America Personal Solutions

Revenue was $52.9 million, a 16 percent increase from the fourth quarter of 2011. Operating margin was 30.1 percent compared to 30.5 percent in the fourth quarter of 2011.

For the full year of 2012 revenues grew by 13% to US$204.5 million

North America Commercial Solutions

Revenue was $27.6 million, up 4 percent in U.S. dollars and local currency compared to the fourth quarter of 2011. Operating margin was 34.4 percent which was flat compared to the fourth quarter of 2011.

For the full year of 2012 revenues grew by 1% to US$ 89.9 million

First Quarter and Full Year 2013 Outlook

Based on the current level of domestic and international business activity and current foreign exchange rates as well as the continuing level of mortgage activity, consolidated revenue for the first quarter of 2013 is expected to be up 10 to 12 percent from the year-ago quarter. First quarter 2013 adjusted EPS attributable to Equifax, which excludes the impact of acquisition-related amortization expense, is expected to be between $0.84 and $0.87, up 20 to 24 percent from the first quarter of 2012. The outlook for adjusted EPS includes a negative impact of approximately $0.01 resulting from the disposition of two business units in the first quarter of 2013.

Source:  Equifax EaEquifax Full Year 2012 Geographyrnings ReleaseEquifax Q4 2012AEquifax Q4 2012C

Equifax Q4 2012B