Equifax drops after cutting full-year forecast on weak mortgage activity
Equifax (EFX) drops after cutting full-year forecast on weak mortgage activity
EFX
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Equifax (NYSE:EFX) shares dropped about 4.5% in after-hours trading after the company lowered its full-year forecast.
For the second quarter, EFX posted adjusted EPS of $1.71 on revenue of $1.32 billion, which compares to the consensus for earnings of $1.67 per share on revenue of $1.33B. The underperformance was driven by weaker revenue in Workforce Solutions business, which saw a drop of 4.3% in revenue year-over-year.
“Equifax had a solid second quarter against a continuing challenging mortgage market, with very good execution against our 2023 Cloud spending reduction plan,” said Mark W. Begor, CEO of Equifax.
“However, later in the quarter, we saw U.S. mortgage activity at levels below our expectations and slowing U.S. hiring activity, which impacted revenue particularly in Workforce Solutions. Workforce Solutions continued to substantially outperform the underlying mortgage and talent markets, and delivered very strong revenue growth in Government.”
Along these lines, the company said it expects Q3 adjusted EPS of $1.77 on revenue of $1.33B. Analysts were looking for EPS of $1.92 on revenue of $1.35B.
On a full-year basis, Equifax lowered its full-year outlook to a range of $6.85-7.10 from the prior $7.05-7.35 and below the consensus of $7.15. Full-year revenue is seen at $5.3B, down from the prior forecast and consensus of $5.33B.
“We also expect to see the slowing in U.S. hiring to continue throughout 2023, but expect to offset this impact on non-mortgage revenue with stronger growth in the Workforce Government business, as well as solid performance in USIS and International.”
