Wednesday, information solutions provider Equifax Inc. (EFX) reported an increase in profit for the second quarter, with revenues advancing 6% that was better than expected as overall market conditions began to improve and the company continued to benefit from new product innovations.
Net income attributable to Equifax increased to $71.3 million or $0.56 per share from $59.6 or $0.47 per share in the comparable quarter a year ago.
Income from continuing operations, net of tax, increased to $57.7 million or $0.45 per share from $56.4 million or $0.44 per share in the year-ago period.
Net income attributable to Equifax, adjusted for gain from sale of business and acquisition-related amortization expense increased to $74.1 million or $0.58 per share from $73.1 million or $0.57 per share last year.
On average, six analysts polled by Thomson Reuters expected the company to earn $0.57 per share for the quarter. Analysts' estimates typically exclude special items.
The company recorded a gain from the sale of its APPRO product line in April of approximately $12 million, after tax. On July 1, the company completed the sale of its Direct Marketing Services for $117 million, subject to certain adjustments. Both of the businesses are reported as discontinued operations.
Operating revenue increased 7% to $460.7 million from $429.1 million at the end of the year-ago quarter. Revenue increased 6% from the prior year excluding the favorable effect of foreign exchange rates. Four Wall Street analysts estimated a revenue of $466.39 million for the quarter.
At the individual business unit level, International, TALX, North America Personal Solutions, and North America Commercial all exceeded expectations. US Consumer Information Solutions revenue was flat, in line with the company's expectations, with significantly improved operating margin from the first quarter.
Operating margin from continuing operations was 23% for the second quarter, down from an operating margin of 23.8% a year ago.
U.S. Consumer Information Solutions or USCIS total revenue was $184.6 million, compared with $184.7 million in the second quarter last year. TALX total revenue was $99.0 million, a 15% increase over the year-ago quarter. North America Personal Solutions revenue was $40.3 million, an 8% increase from last year.
North America Commercial Solutions revenue was $18.6 million, up 13% in local currency and up 18% in U.S. dollars, compared with the second quarter of 2009.
Total operating expenses rose to $354.9 million from $327.1 million last year.
The company paid a dividend of $0.04 per share for the quarter.
Cash and cash equivalents at the end of the period were $70.1 million, compared with $63.6 million at the end of the year-ago period.
Maintaining its outlook for third quarter, the company expects adjusted earnings between $0.55 and $0.59 per share.
The revised consolidated revenue outlook for the third quarter based on the current level of domestic and international business activity and current foreign exchange rates, is expected to be up in the mid to upper single-digits from the year-ago quarter. Earlier consolidated revenues were expected to be up in the low to mid single-digits from the year-ago quarter.
The company repurchased 1.7 million common shares on the open market for $55.4 million during the second quarter. At June 30, its authorization for future share repurchases was $207.2 million.
For the first quarter, Equifax reported an increase in earnings helped by a 3% increase in revenue as the North America Personal Solutions and North America Commercial Solutions segments exceeded expectations for revenue growth. However, first quarter adjusted earnings declined.
EFX closed Wednesday's last trade at $30.25, down $0.55 or 1.79%, on a volume of 773 thousand shares on the NYSE. The stock has been moving in a range of $25.54 - $36.63 for the past 52 weeks, with a three-month average volume of about 1.22 million shares.
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