Acxiom Earnings Climb 27%
Pre-tax earnings were $44 million for the quarter ended Dec. 31, up from $34.6 million in the third quarter of fiscal 2005. Revenue was $347.4 million, up 11 percent from $312.4 million in the third quarter a year ago. The net impact of acquisitions and divestitures contributed 5 percentage points of this 11-point growth in revenue.
Income from operations of $52.7 million was up 34 percent from $39.4 million in the third quarter last year. Diluted earnings per share of 31 cents were up 29 percent from 24 cents a year ago.
All represent record quarterly performances for the company.
"Our third-quarter results are very encouraging and demonstrate the continuing improvement in our financial performance," company leader Charles D. Morgan said. "Combined with the recent announcement of our strategic partnership with EMC Corporation and the outlook for the fourth quarter and fiscal 2007, our performance in the third quarter is clear evidence of the growing momentum at Acxiom."
Other highlights of Acxiom's third quarter:
* A technology and distribution agreement with EMC Corp. that includes $30 million from EMC to buy the grid operating system developed by Acxiom and to license certain other grid-related software. The deal contributed $20 million of Acxiom's free cash flow performance in the quarter but did not affect revenue, earnings or operating cash flow.
* New contracts that will deliver $41 million in annual revenue, plus renewals that total $31 million in annual revenue. Committed new deals in the pipeline are expected to generate $68.4 million in annual revenue.
Morgan noted that Acxiom recently completed new contracts with AIG Marketing, Canadian Tire Financial Services, Federated Department Stores, Hyundai Motor America, Lowe's, Nationwide, Novartis Pharmaceuticals, Staples, ZelnickMedia and Primedia.
Meanwhile, Information Resources Inc., which provides enterprise market information services in consumer packaged goods, retail and healthcare, introduced with Acxiom yesterday a consumer insight suite giving CPG manufacturers and retailers an unprecedented ability to target specific types of consumers who have a high likelihood to want and buy selected product categories.
The suite combines the IRI Consumer Network Household Panel information with Acxiom's InfoBase data and Personicx consumer segmentation solution. Personicx uses consumer segmentation and data integration techniques to assign each of the 110 million U.S. households from InfoBase to specific clusters based on life stage and attitudes.
This segmentation draws on multiple sources of information for each household. The suite provides a series of unique consumer portraits. These reports include in-depth descriptions of key clusters in terms of life stage, lifestyle, product purchase behavior, opinions and attitudes, interests and hobbies, and media usage habits.
The IRI Consumer Network Household Panel consists of 70,000 U.S. consumers who scan their bar-coded purchases. InfoBase contains continuously updated addresses and demographics for 110 million U.S. households.
In other news, an Acxiom spokesman confirmed yesterday that former Postmaster General William J. Henderson will remain an Acxiom board member after he was named chief operations officer at Netflix. Henderson was postmaster general from May 1998 until retiring in May 2001.
Henderson starts at Netflix on Monday. He will manage the operations of the movie rental giant, which has 37 U.S. distribution centers that handle 1 million DVDs daily.
Henderson was elected to the Acxiom board in 2001. He sits on Acxiom's compensation and nominating committees. He also chaired the company's corporate governance committee, which is responsible for making recommendations to Acxiom's board concerning ethical issues and management succession plans.