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TransUnion (TRU) Beats on Q3 Earnings & Revenues, Ups '19 View

Zacks Equity Research

TransUnion TRU reported solid third-quarter 2019 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 76 cents per share outpaced the consensus mark by 5 cents and improved 16.9% year over year.

Total revenues of $689.3 million beat the consensus mark by $12.5 million and increased 14% year over year on a reported basis, 15% on a constant-currency basis and 15% on an organic constant-currency basis.

Adjusted revenues (excluding the impact of deferred revenue purchase accounting reductions and other adjustments to revenues for the company’s recently acquired entities) came in at $689 million, up 11% year over year on a reported basis, 12% at constant currency and 11% at organic constant currency.

We observe that shares of TransUnion have gained a massive 45.2% year to date, outperforming the 37.3% rally of the industry it belongs to.

 

 

Revenue Growth Across All Segments

The U.S. Markets revenues of $420 million increased 12% year over year on a reported basis and 11% on an organic basis. Within the segment, Financial Services revenues of $225 million increased 13% year over year on a reported and organic basis. Emerging Verticals revenues, including Healthcare, Insurance and all other verticals, were $195 million, up 11% year over year on a reported basis and 8% on an organic basis.

International revenues rose 24% year over year on a reported basis and 28% at constant-currency basis to $160 million. Adjusted revenues also came in at $160 million, up 10% year over year on a reported basis and 14% at constant-currency basis. Revenues from Canada, Latin America, United Kingdom, Africa, India and Asia Pacific increased year over year on a reported as well as constant-currency basis.

Revenues at the Consumer Interactive segment improved 7% from the prior-year quarter number to $128 million.

Margin Expanded

Adjusted EBITDA was $281 million, up 15% year over year on a reported basis, 16% on a constant-currency basis and 15% on an organic constant-currency basis. Adjusted EBITDA margin came in at 40.7% compared with 39.4% in the prior-year quarter.

TransUnion Price, Consensus and EPS Surprise

 

TransUnion Price, Consensus and EPS Surprise

TransUnion price-consensus-eps-surprise-chart | TransUnion Quote

Balance Sheet and Cash Flow

TransUnion had $235.9 million in cash and cash equivalents at the end of third-quarter 2019 compared with $194.7 million at the end of the prior quarter. Long-term debt was $3.65 billion, compared with $3.83 billion in the prior quarter. The company generated $279.4 million in cash from operating activities and CapEx was $44.1 million. The company paid out $14.1 million in dividends in the quarter.

Q4 Outlook

For the fourth quarter of 2019, TransUnion expects adjusted revenues between $667 million and $672 million, suggesting an improvement of 7-8% year over year.

Adjusted EPS is expected between 69 cents and 71 cents, indicating a rise of 5-7% year over year. The Zacks Consensus Estimate of 71 cents came in line with the higher end of the guided range.

Adjusted EBITDA is anticipated in the range of $264-$268 million, suggesting an increase of 6-8%.

2019 View

TransUnion raised its 2019 guidance. The company now expects adjusted revenues between $2.644 billion and $2.649 billion, indicating year-over-year increase of 13%. The previous guidance was between $2.628 billion and $2.638 billion.

Adjusted EPS is anticipated in the band of $2.74-$2.76, suggesting improvement of 10%. The previous expectation was in the band of $2.66-$2.69. The Zacks Consensus Estimate of $2.77 exceeded the currently guided range.

Adjusted EBITDA is expected in the range of $1.048-$1.052 million, indicating year-over-year increase of 14-15%. The previously anticipated range was $1.036-$1.044 million.

Zacks Rank & Upcoming Releases

Currently, TransUnion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2019 earnings of key players like Clean Harbors CLH, Aptiv APTV and Republic Services RSG, each scheduled to release results on Oct 30.

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