IHS Markit’s fiscal 3Q earnings beat Street, while Factset posts narrow 4Q earnings miss

Market tracker IHS Markit Ltd (Nasdaq:INFO) beat Street estimates on both earnings and revenue in the fiscal third quarter, while FactSet Research Systems Inc (NYSE:FDS) reported an earnings miss Tuesday although revenue was in line with the consensus view.

London-based IHS Markit reported fiscal third quarter earnings of $0.58 per share on revenue of $1 billion. The consensus earnings estimate was $0.55 per share on revenue of $961.1 million. Revenue grew 10.6% on a year-over-year basis.

Markit’s financial services segment, which provides pricing, data, indices, valuation, trading services, enterprise software, and managed services to traders and portfolio managers, saw revenue swell by 16%.

READ: Expected US interest rate hike to draw the attention Wednesday, as Trump trade wars rumble on

“We continue to deliver broad-based revenue and profit growth and solid free cash flow conversion,” said IHS Markit CFO Todd Hyatt.

The firm also offered a rosy outlook for fiscal 2018. It expected revenue to range between $4 billion to $4.02 billion, up from a prior view of $3.85 billion to $3.9 billion. The current consensus earnings estimate is $2.28 per share on revenue of $3.90 billion for the year ending November 30, 2018.

FactSet earnings

Financial data and software company Factset Research reported fiscal fourth quarter earnings of $2.20 per share, which was two pennies below Wall Street expectations. A revenue increase of $345.9 million was in line with views.

The company said it continues to expect fiscal 2018 earnings of $8.37 to $8.62 per share on revenue of $1.34 billion to $1.36 billion. The current consensus earnings estimate is $8.54 per share on revenue of $1.35 billion for the year ending August 31, 2018.

The firm recently inked a multiyear deal to be the primary market data provider for Merrill Lynch Wealth Management. It is estimated the deal will be worth $35 million to $65 million per year

“Solid quarter and guide but wouldn’t preclude some share weakness,” wrote Oppenheimer analysts Glenn Greene and Andrew Hummel in a note to clients.

The analysts maintained a $231.65 price target on FactSet stock saying they were “highly attracted” to FactSet’s business model, historical track record, and long-term growth opportunities.

“The company remains a relatively small player (4.5% share) in a $28.5 billion market, and we believe FactSet’s growth drivers — product/service innovation, proprietary content, pricing, and strong customer service — remain intact,” wrote the analysts.

“Our favorable long-term view is tempered largely by persistent macro-related headwinds (for both buy/sell side) that drive client fee pressure. We await signs of sustainable organic annual subscription value acceleration before becoming more constructive. Our rating is Perform,” they added.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors