Financial data provider FactSet Research Systems, Inc. (FDS) reported Tuesday a profit for the third quarter that increased from last year, reflecting a revenue increase amid net client growth. Adjusted earnings per share matched analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also provided earnings and revenue guidance for the fourth quarter, in line with Street view.
"We again delivered double-digit diluted EPS growth and our free cash flow reached an all-time high of $92 million during the third quarter of fiscal 2013. Off-market conditions, especially on the sell-side, continue to interrupt client buying patterns and limited our ASV growth this quarter as expected," Chairman and CEO Philip Hadley said in a statement.
The Norwalk, Connecticut-based company reported net income of $53.37 million or $1.20 per share for the third quarter, higher than $47.98 million or $1.05 per share in the prior-year quarter. Excluding items, adjusted net income for the latest quarter was $1.15 per share.
On average, nine analysts polled by Thomson Reuters expected the company to earn $1.15 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter increased 6 percent to $214.61 million from $202.31 million in the same quarter last year, but missed eight Wall Street analysts' consensus estimate of $214.94 million by a whisker.
Annual Subscription Value or ASV for the third quarter increased $2 million organically to $864 million from last year. ASV from FactSet's U.S. operations was $590 million, and $274 million were related to international operations.
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 third quarter totaled 2,440, a net increase of four clients during the quarter. Annual client retention rate was greater than 95 percent of ASV and 92 percent of clients.
However, operating margin for the quarter contracted 50 basis points to 33.4 percent from last year.
Additionally, the company said it increased regular quarterly dividend by 13 percent to $0.35 per share from $0.31 per share, payable today to common stockholders of record as of May 31, 2013.
In mid-May, the company's board of directors also approved a $200 million expansion to the existing share repurchase program.
Looking ahead to the fourth quarter, FactSet expects earnings in a range of $1.18 to $1.21 per share, on projected revenues between $218 million and $221 million.
Street is currently looking for earnings of $1.18 per share on revenues of $220.22 million for the fourth quarter.
FDS closed Monday's regular trading session at $103.76, up $2.52 on a volume of 1.02 million shares. In the past 52-week period, the stock has been trading in a range of $86.88 to $104.85.
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