IHS Markit (INFO) Tops Q4 EPS by 4c; Offers FY20 EPS/Revenue Guidance

IHS Markit (NASDAQ: INFO) reported Q4 EPS of $0.65, $0.04 better than the analyst estimate of $0.61. Revenue for the quarter came in at $1.12 billion versus the consensus estimate of $1.12 billion.

• Revenue of $1.120 billion, including total organic revenue growth of 6 percent
• Net income of $202 million and diluted earnings per share (EPS) of $0.50
• Adjusted EBITDA of $453 million and Adjusted earnings per diluted share (Adjusted EPS) of $0.65
• Cash flow from operations of $226 million and free cash flow of $148 million

“2019 was another successful year for IHS Markit. We delivered our third consecutive year post merger to our longer-term financial commitments demonstrating the consistency of our execution and business model. We also announced our new capital allocation framework that will return a greater amount of capital to investors through continued buybacks and the initiation of a quarterly cash dividend. Finally, we rebalanced our portfolio and continued to increase the pace of product innovation that will fuel future growth in the years to come,” said Lance Uggla, chairman and chief executive officer at IHS Markit.

“We finished the year with a solid Q4 in which we delivered 6% organic revenue growth, strong Adjusted EBITDA margin expansion, and mid-teens adjusted EPS growth. For the full year, we delivered another strong year and believe we enter 2020 with good operational momentum,” said Todd Hyatt, chief financial officer at IHS Markit.

GUIDANCE:

IHS Markit sees FY2020 EPS of $2.82-$2.88, versus the consensus of $2.86. IHS Markit sees FY2020 revenue of $4.52-4.59 billion, versus the consensus of $4.58 billion.

For the year ending November 30, 2020, IHS Markit expects:

• Revenue in a range of $4.52 billion to $4.59 billion, with total organic growth of 5 percent to 6 percent;
• Adjusted EBITDA in a range of $1.86 billion to $1.89 billion; and
• Adjusted EPS in a range of $2.82 to $2.88 per diluted share.

Additionally, for the year ending November 30, 2020, IHS Markit expects:

• Depreciation expense to be approximately $220 million to $230 million;
• Net interest expense to be approximately $235 million to $245 million;
• Amortization expense related to acquired intangible assets to be approximately $365 million to $375 million;
• Stock-based compensation expense to be approximately $220 million to $225 million;
• A GAAP effective tax rate of approximately 14 percent to 16 percent;
• An adjusted effective tax rate of approximately 18 percent to 20 percent;
• Weighted average diluted shares of approximately 400 million to 405 million;
• Capital expenditures to be approximately 6.0 percent to 6.5 percent of revenue; and
• Free cash flow conversion as a percentage of Adjusted EBITDA in the low 60%’s.

For earnings history and earnings-related data on IHS Markit (INFO) click here.

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