First quarter revenues fell less than expected as the credit data group reported a 4% in their North American market
US performance helps Experian post resilient results
- Investors welcome 4% rise in revenue from North American market, with especially good growth in consumer services
- Weakness caused by pandemic in UK, Europe and some emerging markets led to a 1% drop in revenues overall
- Shares dropped 1% in early trading but remained in line with overall market fall seen this morning and it’s notable the stock has strongly outperformed so far this year
- Recommendation: We maintain our ‘Buy’ recommendation for medium risk investors looking for long-term growth, but we would suggest drip-feeding into the stock for the time being
Experian, the world’s largest credit data group, today reported a resilient performance in its first quarter but declined to give any full-year guidance due to the ongoing level of economic uncertainty. For investors the good news was that the company’s most important region, North America, saw a 4% rise in revenue in the three months to June, with especially good growth in consumer services. However, weakness caused by the coronavirus pandemic in the UK, Europe and some emerging markets led to a 1% drop in revenues overall. The company expects second quarter revenue growth to be in the range of flat to down 5%, but acquisitions should add 2% to growth in the year as a whole.
The shares dropped 1% in early trading in response but that was in line with a fall in the overall market, and it’s notable that the stock has strongly outperformed so far this year. Overall these are relatively good numbers from Experian, especially in the all-important US market, and underscore the company’s defensive attractions. Investors should note that the picture outside the US is clearly very mixed, but the company noted some improvement in trading conditions in June as lockdowns were eased in many countries. We maintain our Buy recommendation for medium risk investors looking for long-term growth, but we would suggest drip-feeding into the stock for the time being.
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