DOW JONES NEWSWIRES
Equifax Inc.'s (EFX) first-quarter net income fell 17%, with the
company suffering as its financial-services customers struggle
against the credit crisis and recession.
Equifax, one of the three major U.S. credit-reporting bureaus,
has been reallocating resources to chase revenue in a tough
environment. For instance the company's new settlement services
business quadrupled its revenue last year, offsetting big declines
in the core mortgage-reporting business.
"First-quarter results were solid in a very difficult
environment," said Richard F. Smith, Equifax's chairman and chief
executive. "As our senior executives continue to be deeply involved
with our larger customers, it is clear that the current environment
is significantly impacting customers' long-term business
strategies."
Last week, rival Experian PLC (EXPGY) said it remain cautious in
its outlook despite some signs the financial sector is
stabilizing.
Equifax reported net income of $56.1 million, or 43 cents a
share, down from $67.4 million, or 50 cents a share, a year
earlier. Excluding acquisition- and restructuring-related charges,
earnings fell to 58 cents from 60 cents.
Revenue dropped 10% to $452.9 million, with more than half the
decline due to the stronger dollar.
In February, the company said it expected adjusted earnings of
52 cents to 57 cents a share, below Wall Street expectations at the
time, with revenue similar to the $446.6 million posted for the
fourth quarter.
Operating margins fell to 22.7% from 25.1%, largely on
restructuring charges.
The U.S. consumer information solutions segment, which typically
accounts for half of Equifax's revenue, posted a 10% decrease.
Revenue at the Talx unit, which verifies borrower information for
mortgage lenders and provides human-resources services, rose 10%.
Equifax bought the company for $1.4 billion in 2007.
Total international revenue fell 22%, but only 2% in local
currencies.
For the second quarter, Equifax expects adjusted earnings of 55
cents to 60 cents a share on revenue roughly the same or up
slightly from the first quarter. Analysts expect earnings of 57
cents a share on revenue of $449.2 million.
Equifax shares were inactive after-hours; the stock closed at
$26.36.
-By Jay Miller, Dow Jones Newswires; 201-938-2331;
jay.miller@dowjones.com