Neustar reported financial results for their fiscal year 2012 third
quarter yesterday after the close. Diluted earnings per share increased 50% to $0.90
per share and total revenue for the quarter grew 38% to $211.2 million. The
street was looking for EPS of $0.72 per share on revenues of 210.25 million.
Shares of NSR have reacted favorably to yet another “beat and raise”, up ~6%
mid-way through trading Tuesday.
The integration of TARGUSinfo, reported as Information Services (IS),
continues to proceed extremely well. While only the back office has been fully integrated
into the company and management did not expected to see revenue synergy until
late 2013 or early 2014, revenue synergies are already being realized. Neustar
is reaping the benefits of a single coherent sales operation platform they have
just finished developing, allowing them to cross-sell and up-sell new and existing
services. IS revenue totaled $42.3 million, representing an 11% sequential
growth. We see the early success of the IS segment as a positive near-term
catalyst for Neustar as it is showing strong early signs of being a significant
contributor to the company’s overall business, further diversifying revenue
mix.
Neustar continues to participate in the recompete process for the NPAC
contract. President and CEO Lisa Hook believes that based on the three criteria
the RFP uses to evaluate potential bidders, Neustar is “well-positioned to
retain the contract to manage the impacts of any term that will begin in July
2015”. Neustar has been the NPAC administrator for the past 15 years building
the world’s largest and most complex local number portability system.
The company repurchased 688k shares for approximately $25 million
during the third quarter. Despite the share repurchase, cash, cash equivalents,
and investments increased $34.2 million, to $269.2 million.
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