Earnings Preview: Acxiom - Analyst Blog
July 22 2011 - 12:30PM
Zacks
Acxiom Corporation (ACXM) is scheduled to
announce its first quarter 2012 results before the financial
markets open on Wednesday, July 27, 2011.
The company has consistently met or exceeded expectations. On
average, Acxiom has beaten the Zacks Consensus Estimate by 11.09%
in the last four quarters.
Fourth-Quarter Recap
Acxiom Corp posted a net income (excluding one-time items) of
$17.5 million or 21 cents per share compared with $15.6 million or
19 cents per share in the year-ago, beating the Zacks Consensus
Estimate of 19 cents.
Including one-time items, net loss was $67.1 million or 83 cents
per share compared with a net income of $16.6 million or 21 cents
per share in the year-ago quarter. The loss was mainly due to
an impairment
charge of goodwill and intangible assets.
Revenues for
the fourth quarter of fiscal 2011 came in at $298.8 million, up
3.6% year over year and in line with management’s expectation of
$295 million to $299 million.
Agreement of Estimate
Revisions
In the
absence of any significant news, none of the 5 analysts providing
estimates changed their earnings estimates in the last 30
days.
Magnitude of Estimate
Revisions
In the last
thirty days, the Zacks Consensus Estimate for 2012 was stable at 77
cents per share, representing a growth of 12.5%. Estimate for the
first quarter of fiscal 2012 was also static at 13 cents per share,
reflecting year-over year growth of 5%.
However,
earnings estimates for fiscal 2012 have declined in the last ninety
days due to the uncertainty in management and lawsuits initiated by
the purchasers of common stock of Acxiom between October 27, 2010
and March 30, 2011.
Our
Take
We are
concerned about the several lawsuits initiated against the company,
alleging Acxiom of having violated the Exchange Act. The stock
holders allege that the financial statements issued by the company
were false and misleading, which artificially inflated the price of
Acxiom’s securities.
Moreover,
Acxiom’s international operations were on the decline and not
operating as per plan. They also claimed that the impairment of
international operations was not recorded properly and on
time.
Additionally, the company’s
CEO and President John A. Meyer and CFO Christopher W. Wolf
resigned from their posts. As a consequence, we fear an increase in
the rate of attrition of employees and adverse affect on the
businesses, operating results, financial results and internal
controls.
We prefer to
wait for greater clarity given the uncertainty due to the change in
management and the legal cases. Currently, we maintain a long-term
Neutral recommendation on the stock. Acxiom has a Zacks #3 Rank,
which translates into a short-term Hold rating (1-3
months).
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