Verisk (VRSK) Surpasses Q4 Earnings & Revenue Estimates
Zacks Investment Research | Feb 19, 2020 05:53AM ET
Verisk Analytics, Inc. (NASDAQ:VRSK) reported solid fourth-quarter 2019 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of $1.13 beat the consensus mark by a penny and improved 8.7% on a year-over-year basis. The company’s bottom line benefited from organic growth, contributions from acquisitions and lower average share count, which were partially offset by the rise in depreciation and amortization expense, interest expenseand a higher effective tax rate.
Revenues of $676.8 million beat the consensus estimate by 1.1% and improved 10.2% year over year on a reported basis and 5.4% on an organic constant-currency (cc) basis.
On Feb 1, 2020, the company completed the previously announced sale of its aerial imagery sourcing group to Vexcel Imaging in exchange for a minority interest in Vexcel. Through this deal, Verisk will get access to a geospatial data library. Further, it enables Verisk to focus solely on aerial data analytic solutions to better serve commercial and insurance customers. On Feb 5, 2020, the company inked a deal to transition its Argus Data Warehouse business to a partner to focus on its core analytics capabilities. On Feb 14, 2020, the company completed the sale of its compliance background screening business for $24 million in cash.
Over the past year, shares of Verisk have gained 36.8%, compared with 38.9% growth of the industry it belongs to and 21% increase of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Segmental Performance
Insurance segment revenues totaled $468.9 million, up 7.5% year over year on a reported basis and 5.2% in organic cc.
Within the segment, underwriting and rating revenues of $318.5 million rose 9.9% on a reported basis and 8.2% in organic cc. The improvement was primarily driven by increase in industry-standard insurance programs, property-specific underwriting and catastrophe modeling solutions revenues. Claims revenues amounted to $150.4 million, which improved 2.8% on a reported basis but declined 1% in organic cc. The upside wasdriven by claims analytics, workers’ compensation claim solution services, and repair cost estimating solutions.
Energy and Specialized Markets segment revenues amounted to $160.5 million and improved 23.3% year over year on a reported basis and 7.1% in organic cc. The improvement can be attributed to revenues from market and cost intelligence solutions, core research revenues, and environmental health and safety service.
Financial Services segment revenues of $47.4 million declined 0.3% year over year on a reported basis but improved 2.1% in organic cc. The segment benefited from increase in fraud and credit risk management solutions and portfolio management solutions, which was partially offset by declines in enterprise data management revenues.
Operating Results
Adjusted EBITDA of $318.8 million increased 10.3% on a reported basis and 9% in organic cc. Adjusted EBITDA margin of 47.1% was flat compared with the prior-year quarter.
Operating income in the fourth quarter was $206.6 million compared with $216.2 million in the prior-year quarter. Operating margin was 30.5% compared with 35.2% in the year-ago quarter.
Verisk Analytics, Inc. Price, Consensus and EPS Surprise
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