3Q Revenues In-Line For IHS

JP Morgan writes "[We're] maintaining our Neutral rating on IHS, Inc. IHS shares. In FQ310 (ended August), revenues rose 14%, “adjusted” EBITDA grew 16%, and EPS of $0.76 exceeded our $0.74 estimate. Organic growth was 10% (~7% ex 300bp benefit from the tri-annual Boiler Plate Vessel Code product), while M&A added 500bps and forex trimmed by 200bps. Energy domain revenues grew 8%, while Product Lifecycle jumped 19% (we think up LSD organic), Security rose 5%, and Environment spiked 111% (we think up modestly ex M&A). Cash costs rose 13%—COGS lifted 14% while S,G,&A grew 10%. Stock comp. was flat y-o-y (following big increases in recent periods). EBITDA margin improved 70bps to30.2% on an “adjusted" basis and 60bps (to 25.2%) including stock comp." JP Morgan also maintains its $70 price target. IHS, Inc. closed yesterday at $65.85.