Revenues are perking up at D&B as reflected by a steady growth during the last three quarters. D&B launched 5 new products in Q3 and more product introductions are expected in Q4. Management stated that the upside of the business is not reflected in the current stock price, thus it is undertaking the largest share repurchasing program in its history to take advantage of the current low share price.
CEO Sara Mathew stated in Friday’s earning teleconference call that D&B’s results were either in-line or better than expected. Specifically, core revenue was up 8%, up 3% organically. Operating income was up 14%. EPS was up 17%, and year-to-date free cash flow was approximately $231 million. North America’s top line growth accelerated to 2% in the third quarter, all of which was organic. International was up 28%, up 5% organically due to stronger-than-expected growth in Europe and continued momentum in China. This translated into strong bottom line results, a testament to our scalable business model. As you would expect, we’re pleased with this performance.
In the third quarter, D&B had 5 new product launches, most of which were focused on Sales & Marketing Solutions (S&MS). In the fourth quarter D&B expects to launch additional products in the Risk Management Solutions (RMS) segment. With its new applications development facility in Ireland in place D&B expects to see a steady stream of innovations.
Looking ahead to the fourth quarter, the largest in terms of revenue, D&B expects to sustain top line growth in North America and exit 2011 on a strong note. As such, it is confirming 2011 guidance of core revenue growth of 5% to 8%, operating income growth of 2% to 6%, EPS growth of 6% to 10% and free cash flow between $240 million and $270 million.
In addition, D&B announced a $500 million discretionary share repurchase program, the largest in recent history. D&B believes that its stock represents a great investment opportunity at this time. For 2012, D&B expects to begin to reap the benefits of its Strategic Technology Investment, which will translate into more rapid product innovation and sustained top line growth in North America. Sara Mathew does not believe this upside is reflected in in the current value of D&B stock and D&B is creating the flexibility to take advantage of the current pricing.
Source: D&B Press Release