IHS Tops, Lifts Guidance - Analyst Blog

IHS Inc. (IHS) recently posted fiscal 2010 second-quarter earnings of $38.5 million, a growth of 20.4% from $32.0 million recorded in the year-ago period primarily driven by higher revenues and improved margins. Earnings per share came in at 60 cents, surpassing the Zacks Consensus Estimate of 57 cents.
 
IHS is one of the leading global providers of critical technical information, decision-support tools and related services to customers in a number of industries including energy, defense, aerospace, construction, electronics, and automotive. The company operates through three geographical segments: Americas, EMEA (Europe, the Middle East, Africa and India) and Asia Pacific (APAC).
 
During the quarter, IHS recorded a 13.3% growth in revenues to $266.5 million from $235.3 million in the prior year quarter. The increase was primarily driven by organic growth, acquisitions, CERAWeek executive conference and favorable currency translations. In terms of divisions, Americas and EMEA grew 13% year-over-year each to $168.1 million and $76.4 million, respectively, while APAC segment rose by 16% to $22.0 million.
 
Operating income in the quarter expanded 16.5% to $49.3 million from $42.3 million in the prior year quarter, while operating margin improved 50 basis points to 18.5%. IHS recorded a 17% year-over-year growth in operating income in the Americas, while EMEA and APAC segments posted an increase of 41% and 10%, respectively.
 
At quarter-end, IHS had cash and cash equivalents of $202.8 million, compared to $172.3 million in the year-ago period. During the first half of fiscal 2010, the company generated $179.2 million of cash from operations and received $75 million from borrowings. The company also utilized $83.6 million towards acquisitions, $43.3 million towards repayment of borrowings and $16.3 million towards capital expenditure.
 
Moving forward, IHS lifted its adjusted earnings guidance to $2.90 per share on revenues of $1.045 billion to $1.06 billion in fiscal 2010. The company earlier predicted earnings of $2.87 per share on revenues of $1.04 billion to $1.08 billion.
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