FactSet Research Systems Reports In-Line Third Quarter But Sees Strong Fourth Quarter

Financial research software company FactSet Research Systems reported third quarter results before the bell Tuesday that beat were in line with expectations. However, the company guided earnings per share slightly above Wall Street estimates for the fiscal fourth quarter ended August.

Third Quarter Results

For the fiscal third quarter ended May 31, FactSet reported earnings per share of $1.15, in line with forecasts. Earnings per share grew 9.5 percent from the same period a year ago when the company reported earnings per share of $1.05.

Revenue in the quarter slightly exceeded forecasts though. FactSet reported revenue for the quarter of $215.00 million, beating estimates of $214.94 million by a slight 0.03 percent. Revenue grew six percent from a year ago when the company reported revenue of $202.31 million.

"We again delivered double-digit diluted EPS growth and our free cash flow reached an all-time high of $92 million during the third quarter of fiscal 2013. Off-market conditions, especially on the sell-side, continue to interrupt client buying patterns and limited our ASV growth this quarter as expected," said Philip A. Hadley, Chairman and CEO. "We continue to return capital to shareholders as evidenced by a 13% increase in our dividend and a $200 million expansion to our share repurchase program during the quarter."

Fourth Quarter Outlook

For the fourth quarter, FactSet sees earnings per share being between $1.18 and $1.21, slightly higher than the consensus Wall Street forecast of $1.18. Revenue is expected to be between $218.00 million and $221.0 million, roughly in line with the $220.22 million estimate.

Other Highlights

FactSet noted in its press release several other financial highlights from the quarter. U.S. revenues rose 6 percent while international revenue rose seven percent and quarterly free cash flow rose to a record $92 million, up 32 percent over the same period a year ago.

On the operations side, FactSet added four net new clients in the quarter, bringing total client count to 2,440. The total number of users increased by 61 to 49,516 users as of the end of the quarter with gains in buy-side users off-set by declines in the sell-side business.