Interactive Data Corp. (IDC) reported third-quarter EPS of 45 cents, exceeding the Zacks Consensus estimate of 35 cents per share.
Revenues for the quarter increased to $192.1 million, up 1.9% from $188.6 million in the year-ago period, primarily as a result of to the buoyancy in our fixed income business and reference data product areas, as well as good performance in Europe. The company also witnessed lower cancellation levels across its institutional business compared with first-half 2009 levels. IDC’s organic revenue growth was 3.6% on a year over year basis. The company’s quarterly revenues were unfavorably impacted by $6.3 million due to the effects of foreign exchange resulting from a weaker US dollar in comparison with the year-ago quarter. Revenues before the effects of foreign exchange grew by $9.8 million, or 5.2%, over the year ago period.
In Institutional Services, Interactive Data Pricing and Reference Data reported revenues of $126.7 million, a 5.9% increase over the year-ago period, and Kler’s Financial Data Service S.r.l. (Kler’s), acquired in August 2008, added revenues of $0.9 million in the third quarter. Also, NTT DATA Financial (NDF), which is 90% owned by IDC, contributed a $2.2 million to third-quarter revenues. Excluding the contributions from Kler’s and NDF, related intercompany eliminations associated with NDF and the effects of foreign exchange, third-quarter organic revenues for this business increased 6.8% over the same period last year primarily as a result of new business progress in Europe and enhanced customer relationships in the U.S. Real-Time Services generated revenues of $36.2 million, down 5.1% year over year.
The organic revenue for this business primarily reflects the impact of increased cancellations over the past several quarters for its real-time market data services, offset by continued strong growth in its U.S. Web-based solutions. The Fixed income Analytics segment, reported third-quarter revenues of $8.2 million, which was essentially unchanged from last year’s figures.
In the Active Trader segment, eSignal generated $20.9 million in revenues, down 7.3% year over year (or a decline of $1.3 million or 5.9% before the effect of foreign exchange). As a result of continued declines in the eSignal direct subscriber base and lower advertising revenues. eSignal ended the third quarter with approximately 57,200 direct subscription terminals, down 1.7% from the same period last year but unchanged from the last quarter.
Geographically, Interactive Data’s total third-quarter revenues in North America remained unchanged at $133.0 million compared to the same period last year, Europe generated $50.7 million, unchanged compared to the year-ago quarter. Interactive Data’s Asia-Pacific revenues of $8.4 million in the third quarter were up 73.5% from the year-ago quarter, primarily as a result of the NFD contribution.
Operating results
GAAP Operating income for the third quarter was $58.4 million (30.4% of revenue), up 8.8% from $53.7 million (28.4% of revenues) reported in the year-ago quarter. Excluding special items like contribution from currently acquired business, related intercompany eliminations and effect of foreign currency, non-GAAP income from operations for the quarter was $57.7 million (30.0% of revenue), up 13.3% from $ $50.9 million reported in the year-ago quarter.
Net Income attributable to shareholders for the third quarter was $43.1 million or 45 cents per share, up 17.5% from $36.7 million or 38 cents per share reported in the year-ago quarter.
Balance Sheet
At the end of the third quarter, Interactive Data had no outstanding debt and had cash, cash equivalents and marketable securities of $290.2 million. During the third quarter, Interactive Data repurchased 479,500 shares of its common stock at an average price of $23.63 per share. At the end of the quarter, nearly 2 million shares were available for repurchase under the existing stock buyback program. During the third quarter, Interactive Data paid $18.8 million to stockholders in connection with its regular quarterly dividend of 20 cents per share.
Guidance
Non-GAAP:
The company reiterated its guidance for 2009. Accordingly, organic revenue growth is still expected to be up by around 2% from 2008 levels. Organic income from operations is expected to be up 6% from 2008.
GAAP:
Revenues are expected to be almost flat in 2009 compared to last year. Income from operations for 2009 is also expected to remain flat compared to 2008. The effective tax rate for 2009 is expected to remain in the range of 33% to 34%. Net Income attributable to IDC shareholders, is expected to remain at the same level as 2008. The company expects to incur capital expenditures of $49 million to $50 million.
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