IHS Markit Stock Slips After Revising FY21 Revenue Guidance Below Consensus

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  • IHS Markit Ltd INFO reported third-quarter revenue growth of 10% year-over-year to $1.18 billion and 9% on an organic basis, beating the consensus of $1.17 billion.
  • Sales by segments: Financial Services $490 million (+10% Y/Y); Transportation $347 million (+16% Y/Y); Resources $208 million (flat); and Consolidated Markets & Solutions $136 million (+12% Y/Y).
  • Adjusted EPS improved to $0.85 from $0.77 in 3Q20, beating the consensus of $0.83.
  • Adjusted EBITDA was $515.6 million, compared to $486.2 million in 3Q20, and margin contracted by 160 bps to 43.7%.
  • The operating income increased by 11.3% Y/Y to $290.8 million, and the margin contracted by 30 bps to 24.6%.
  • IHS Markit generated cash from operating activities year-to-date of $1.04 billion, compared to $800.5 million a year ago. It held $337.9 million in cash and cash equivalents as of August 31, 2021.
  • FY21 Outlook: IHS Markit expects revenue of $4.61 billion - $4.63 billion (prior view $4.635 billion - $4.675 billion) versus the consensus of $4.66 billion.
  • Adjusted EPS of $3.18 - $3.20 (prior $3.15 - $3.17) versus the consensus of $3.17.
  • Forecast for Organic revenue growth of 7-8% and Adjusted EBITDA of $2.02 billion - $2.03 billion with a margin of ~44% remains the same.
  • Price Action: INFO shares are trading lower by 6.19% at $115.07 on the last check Tuesday.
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