Equifax Overlooks the Analysts Second Quarter Expectations

Equifax (EFX), a company currently having B or buy rating, disclosed its second quarter financials in consideration to the expectations of analysts. The results revealed that the company has a firm performance globally, yet other components of its balance sheet were counterbalanced by the poor revenues from mortgages. Equifax’s revenue is declared lower by $2.13 million in estimates ($613.9 million). The returns also did not meet the agreement with Street by a $2 million decline. The earnings per share (EPS) is $0.02 more than the expected $0.01 ($0.96). The changes were already anticipated by analysts aside from the 6% growth in revenue.

The chairman and chief executive officer of Equifax, Richard F. Smith, claimed that the recent second quarter reports are results of the company’s efforts in using strategic methods. In general, Smith claims that the management’s 2014 outlook has improved.

The U.S. consumer unit of Equifax increased by 2% ($264.2 million), but countervailed by mortgage resolution issues at 15% downtrend ($27.6 million). Equifax will likely take a break from pressure in mortgages by the forthcoming year.

A rise by 27.3% has been reported for the operating margins of the firm, which is higher compared to 26.9% brought by the U.S. consumer unit expansion of the company.

A 23% year over year increase has been recorded for global sales ($153.4 million). Specifically, a boost of double-digit expansion has been seen in Latin America ($47.9 million). The 40% growth of Europe remains the top-ranking record, which is inclusive of recent acquirement of TDX Group ($72.3 million). The consumer revenue in Canada is preserved with a weak digit growth ($33.2 million). The largest projections of the company are noticeably in their state of procreating the business proposals of credit bureau in early stage markets.

The retold EPS expectation for the fiscal year is approximated to fall within two ranges for the upcoming quarter ($3.83 and $3.91, $0.96 and $0.99). On the other hand, fused returns for the fiscal year are expected to be within the range of $2.440 billion and $2.465 billion. The third quarter solid revenues are expected to close within $620 million and $625 million. Equifax is also restating its B or buy grade and will mark a price value falling within $78.00 and $80.00. There is also a possible uptrend of 8% from the existent trading value. The trade also sells 18 times the earnings per share estimate for 2014 ($76.6).