Acxiom Cuts Costs Amid Q1 Shortfall

Share this content:
Acxiom Corp., Little Rock, AR, said yesterday that revenue and earnings for its first-quarter fiscal 2006 ended June 30 would not meet expectations and that it had begun reducing expenses.


First-quarter revenue of $310 million is expected versus analyst estimates of $324.8 million, and earnings per share will be 6 cents as opposed to the 16 cents expected. The earnings report is to be released July 20.


Though U.S. revenue for Q1 2006 grew 13 percent over Q1 2005, Acxiom's European business was down $4 million, according to Acxiom.


In response to the shortfall, Acxiom said it will cut jobs totaling $16 million annually, or 4 percent of its payroll expenses. Company spokesman Dale Ingram said that 250 jobs would be eliminated including 100 at the firm's Arkansas headquarters.


Other cost-cutting measures include the sale or closing of some operations. Initiatives completed in the past four weeks are the divestiture of a German lettershop and the closing of an Acxiom office in Japan, Ingram said. Others may follow.


"All together, we expect that our expense reduction plan will reduce total expenses by approximately $14 million to $16 million a quarter when the effects are fully realized by the fourth quarter of the fiscal year," Acxiom company leader Charles D. Morgan said in a statement.


Acxiom will not revise its overall fiscal 2006 Financial Road Map estimates.


The announcement came about five weeks after the company received a letter from investment firm ValueAct Capital Partners LP stating its intent to issue an offer of $23 per share for all outstanding shares of common stock. The deal would value the company at $1.97 billion.


The letter, dated June 3, from San Francisco-based ValueAct Capital managing partner Jeffery W. Ubben criticized Acxiom's financial management and board of directors for failing to increase shareholder value. ValueAct owns 10 percent of Acxiom's stock.


Ingram said that Acxiom had not heard from ValueAct since its June 6 acknowledgment of the letter.


Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


Loading links....
close

Next Article in Data/Analytics

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

DMN's Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here