IHS Inc. (IHS), an information and insight products and service provider, Thursday said its third quarter profit increased from last year, driven by continued growth of its business in all regions. The company's adjusted earnings exceeded Street consensus, as did quarterly revenues. Looking ahead, IHS tightened its all-in revenue growth outlook for fiscal 2009. Additionally, the company said it has acquired Environmental Support Solutions Inc. for about $59 million, net of cash acquired.
The Englewood, Colorado-based company reported net income of $34.7 million or $0.54 per share for the third quarter of 2009, up from $21.0 million or $0.33 per share in the prior year quarter.
Adjusted net earnings grew 18% to $0.66 per share from $0.56 per share in the year-ago quarter. On average, 4 analysts polled by Thomson Reuters expected the company to report earnings of $0.60 per share for the third quarter. Analysts' estimates typically exclude special items.
Third quarter revenue increased 15% to $239 million from $207 million in the same quarter last year. Five analysts had a consensus revenue estimate of $234.77 million for the third quarter.
Organic revenue growth in the third quarter was 2% overall, and 9% for the subscription-based portion of the business, which represented 80% of total revenue.
IHS noted that the acquisitions contributed 17% of revenue growth, and foreign currency movements decreased revenue by 4%.
Revenue from the Americas (North and South America) segment rose 15% to $148 million. The EMEA (Europe, Middle East and Africa) segment third quarter revenue grew 12% to $72.6 million. The APAC (Asia Pacific) segment's revenue improved 39% to $19.2 million over a year ago.
During the third quarter of 2009, IHS withheld 41,198 shares valued at $2.0 million to fund employee statutory withholding tax requirements stemming from employee equity awards.
The company ended the third quarter with $118 million of cash and cash equivalents, and $77 million of debt.
In a separate development, IHS said that it has acquired Environmental Support Solutions Inc. for about $59 million, net of cash acquired. The purchase price represents about three times revenue and a high single-digit multiple of forward adjusted EBITDA.
Environmental Support Solutions is a provider of environmental, health and safety and crisis management software for enterprise sustainability.
The acquisition of ESS will give IHS unparalleled offerings in the environmental, health and safety market. It further extends the IHS capabilities in this arena, bringing together two leading solution providers.
ESS has a global client base covering the U.S., Asia, Europe, the Middle East and South America that complements the current IHS customer footprint.
IHS believes that the acquisition of ESS will support its strategy to strengthen and grow its capabilities and offerings in the environment space, which began with the acquisitions of EnvironMax, Dolphin Software and Environmental Software Providers in 2007 and 2008.
For the nine-month period of 2009, IHS posted net income of $93.8 million or $1.47 per share, up from $65.7 million or $1.04 per share in the previous year period. Adjusted earnings per share rose to $1.87 from $1.47 a year ago.
Revenue for the year-to-date period increased 16% to $710 million from $613.4 million in the prior year period.
For fiscal 2009, IHS now expects all-in revenue growth of 14% to 15% from a 2008 base of $844 million. Earlier, the company estimated all-in revenue growth of 12% to 16% for 2009. The Street currently expects revenue of $960.66 million for the year.
For fiscal 2010, the company anticipates all-in revenue in the range of $1.04 billion to $1.08 billion. Analysts currently estimate the company to report revenue of $1.05 billion for the year 2010.
IHS said it expects to provide full 2010 guidance in December 2009.
IHS closed Thursday's regular trading session at $52.30. In after-hours, the shares gained $1.38 or 2.64%.
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