Jan 7 Research firm IHS Inc posted a
better-than-expected fourth-quarter profit and forecast strong
full-year results due to revenue growth in its subscription
business in America and Europe.
The research firm, which owns Cambridge Energy Research
Associates and iSuppli, has relied to acquisitions to grow, and
on Tuesday said it would continue to look for targets to boost
growth in its core sectors of energy, chemicals, technology,
aerospace-defense and maritime.
"Right now we're looking at small tuck-in acquisitions,"
Chief Executive Scott Key told Reuters.
"And then as we get into latter parts of 2014 and will have
really brought the leverage down using our strong cash flows, we
will start looking at more typical larger deals as we have in
the past," Key said.
The company, which also publishes Jane's Defence Weekly, has
bought about 50 companies since 2005 and its targets are firms
with annual revenue of about $40 million on average. Such deals
helped boost subscription revenue by 21 percent in fiscal 2013.
The company said excluding acquisitions it expects growth in
subscription revenue, which accounts for about three-quarters of
annual revenue, in fiscal 2014 to at least match that in fiscal
"We improved our subscription organic growth rate to 7
percent (in the fourth quarter). Everybody was looking for that
and we committed to improving our organic growth and we have
delivered," Key said.
PROFIT BEATS ESTIMATES
IHS expects subscription revenue, excluding acquisitions, to
grow 6-7 percent in fiscal 2014. Such revenue grew 6 percent in
The company, which competes with units of Thomson Reuters
, SAP, Accenture Plc and Deloitte,
expects total revenue of $2.17-$2.23 billion in 2014 and an
adjusted profit of $5.50-$5.85 per share.
Analysts on average are expecting a profit of $5.58 per
share on revenue of $2.2 billion, according to Thomson Reuters
Net income fell to $40.8 million, or 60 cents per share, in
the fourth quarter ended Nov. 30 from $46.4 million, or 69 cents
per share, a year earlier.
Excluding items, profit was $1.46 per share, handily beating
Wall Street expectations of $1.27 per share.
Revenue for the company rose 35 percent to $559.7 million.
Subscription revenue grew 38 percent overall and 7 percent
Analysts on average were expecting revenue of $534.8
million, according to Thomson Reuters I/B/E/S.
Free cash flow rose 62 percent to $405 million in fiscal
Shares of the Englewood, Colorado-based company closed at
$116.02 on Monday on the New York Stock Exchange. They have
gained 17 percent over the last year.