FactSet’s Earnings

Very strong earnings report today from FactSet Research Systems (FDS). Sales and net income both rose 22%. Earnings-per-share came in at 65 cents, two cents a head of the Street. For the same quarter one year ago, FactSet made 56 cents which included a four cent tax benefit.
Here are some highlights from the company:

Other Financial Highlights
* U.S. revenues were $102 million, up 18% from the year ago quarter.
* Revenues from non-U.S. operations increased 30% to $45.7 million.
On a constant currency basis the increase was 29%.
* Operating margins were 32.5%, consistent with the previous and
year ago quarters.
* Other income declined 60% to $0.9 million from a reduction in U.S.
interest rates during the last nine months.
* Free cash flows generated during the quarter was a record
$45.8 million, exceeding the average of the previous four quarters
by $17 million.
Operational Highlights — Third Quarter of Fiscal 2009
* Users rose to 39,600 at quarter end, up 500 professionals over the
past three months.
* Client count was 2,044 at May 31, a net increase of 23 clients.
* PA 2.0 subscribers totaled 5,487 users from 607 clients at the end
of the quarter.
* Employee count at May 31, 2008 was 1,826. Headcount did not change
during the third quarter. The number of employees is up 18% over
the last year.
* FactSet already has accepted offers from 80 new employees for the
upcoming fourth quarter, the majority of which will expand the
sales and consulting and engineering departments.
* Capital expenditures were $12.3 million, net of landlord
contributions for construction. Expenditures for computer equipment
were $7.6 million and the remainder covered office space expansion.
* Client retention rate remained above 95%.
* On May 8, the Company’s Board of Directors approved a 50% increase
in the regular quarterly dividend from $0.12 per share to $0.18 per
share. The cash dividend of $0.18 per share will be paid on
June 17, 2008 to holders of record of FactSet’s common stock on
May 29, 2008.
* Common shares outstanding at May 31, 2008 were 48.0 million.

Here’s a look at the company’s stock (blue, left scale) and earnings-per-share (gold, right scale). The two lines are scaled at 30-to-1. FactSet’s P/E ratio plunged from 37 in October to 19 in mid-March.

Posted by Eddy Elfenbein on June 17th, 2008 at 10:37 am

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