- Wednesday, October 16, 2024
Equifax, the credit-reporting firm, has fallen short of third-quarter estimates, leading to a decline in its stock price. The company reported adjusted earnings of $1.76 per share, below the expected $1.78, while revenue came in at $1.32 billion, falling short of the projected $1.33 billion.
Lowered Guidance for 2023
Equifax has also reduced its guidance for 2023. The company now expects adjusted earnings per share of $6.67 and revenue of $5.256 billion, down from previous estimates by 31 cents and $44 million, respectively. Analysts had anticipated adjusted earnings per share of $6.90 and revenue of $5.298 billion.
Factors Impacting Performance
Equifax attributes the lowered guidance to the weak U.S. mortgage market and the effects of foreign exchange. The acquisition of Boa Vista, the second-largest credit bureau in Brazil, has provided some benefits. Equifax CEO Mark W. Begor explained that the company expects the weak mortgage market and high interest rates to continue affecting performance in the fourth quarter.
Analyzing the Situation
Equifax stock has fallen by 6.8% to $163.20 in premarket trading. Analysts from William Blair, led by Andrew Nicholas, have stated their intention to gain insights during the earnings call. They are particularly interested in understanding the reasons behind the guidance adjustments and Equifax's expectations for the mortgage market as the year comes to a close.
Looking Ahead
Despite the challenges in the mortgage business, Equifax's nonmortgage revenues and the competitive advantages of its Workforce Solutions business give analysts reason to remain optimistic about the company's current valuation. They believe that once mortgage activity levels normalize, Equifax will experience significant earnings growth.
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