FactSet Research Q2 Results Top Estimates, Guides Q3 EPS In Line

(RTTNews) - Financial data provider FactSet Research Systems, Inc. (FDS) reported Tuesday a profit for the second quarter that increased 18 percent from last year, reflecting improved margins and revenue growth. Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided earnings guidance for the second quarter, in line with Street view.

"Our second quarter results reflect an improving buy-side client base, and include acquiring the remaining 40% interest in Matrix. I'm pleased to see that our net client growth in the past three months was the highest quarterly total since 2006 and buy-side users grew at a level we've not seen since 2004," Chairman and CEO Philip Hadley said.

The Norwalk, Connecticut-based company reported net income of $52.43 million or $1.22 per share for the second quarter, higher than $44.54 million or $1.00 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $52.43 million or $1.22 per share, compared to $49.28 million or $1.11 per share in the year-ago quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $1.21 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter increased 7 percent to $226.93 million from $213.08 million in the same quarter last year, and topped thirteen Wall Street analysts' consensus estimate of $226.36 million by a whisker.

Domestic revenues for the quarter grew 6 percent to $154.3 million, and international revenues increased to $72.7 million from the prior-year quarter.

Annual Subscription Value or ASV for the second quarter increased 6 percent organically to $920 million from last year. ASV from FactSet's U.S. operations was $626 million, and $294 million were related to international operations.

The company noted that about 82.7 percent of ASV is derived from buy-side clients and the remainder from the sell-side firms who perform merger and acquisition advisory work and equity research.

ASV represents the forward-looking revenues for the next 12 months from all annual subscription services currently being supplied to clients.

Client count at the end of the second quarter totaled 2,632, a net increase of 32 new clients during the quarter. Annual client retention rate was greater than 95 percent of ASV and 92 percent of clients.

Operating margin for the quarter improved 670 basis points to 33.1 percent from last year.

The company noted that it also completed the acquisition of the remaining 40 percent ownership interest in U.K.-based Matrix Data Ltd. in the second quarter. It had earlier acquired a 60 percent ownership interest in Matrix in December 2013.

Looking ahead to the third quarter, FactSet expects adjusted earnings in a range of $1.24 to $1.26 per share, on projected revenues between $229 million and $233 million.

Street is currently looking for earnings of $1.26 per share on revenues of $228.70 million for the quarter.

FDS closed Monday's regular trading session at $104.54, up $0.08 on a volume of 0.79 million shares.