FactSet tops analysts’ estimates for earnings in Q3 but falls shy in terms of revenue

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on Jun 25, 2020
Updated: Jun 1, 2022
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  • FactSet reports £301.20 million in revenue in Q3 and £2.30 of adjusted earnings per share.
  • The financial data and software company announces a 7% increase in its quarterly dividend.
  • The Norwalk-headquartered company upgrades its annual financial guidance for 2020.

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FactSet Research Systems (NYSE: FDS) released its quarterly financial results on Thursday that topped the analysts’ estimates for earnings but fell slightly shy in terms of revenue in the fiscal third quarter. FactSet partnered with Barclays to bolster transparency in the bond market in January.

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Shares of the company are about 2.1% up in premarket trading on Thursday. At £239.30 per share, FactSet is currently more than 10% up year to date in the stock market after recovering from a low of £164.69 per share in March. Learn more about how to invest in the stock market.

In a press release on 24th June, FactSet revealed two new members to have joined its Board of Directors to replace two members who retired. The press release also named Robin Abrams as the new chairman of the board.

Highlights of FactSet’s Q3 financial results

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FactSet printed its revenue in Q3 at £301.20 million that marks a 2.6% increase as compared to £293.47 million in the same quarter last year. Organic revenue, the company added, came in 2.6% higher on Thursday.

The company said that its revenue growth in Q3 was primarily driven by higher demand for analytics, wealth management solutions, and CTS (content and technology solutions). FactSet recorded its client count at 5,743 in the third quarter and user count at 131,095.

On the earnings front, FactSet registered £2.30 per share (adjusted) in the recent quarter that topped the year-ago figure of £2.11 per share by 9.2%. The company attributed improved EPS (earnings per share) to its upbeat operating results in Q3.

The financial data and software company recorded its operating margin at 32.5% in the third quarter versus 32.2% in the comparable quarter of last year. On an adjusted basis, its Q3 operating margin improved from 34% to 35.5%.

FactSet announces a 7% increase in its quarterly dividend

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According to FactSet, its performance was commendable in the third quarter, considering the novel challenges raised by the Coronavirus pandemic. The Norwalk-headquartered company announced a 7% increase in its quarterly dividend to 62 pence a share.

FactSet updated its financial guidance for 2020 on Thursday forecasting its GAAP revenue to now fall between £1,195.63 million and £1,199.66 million. Its adjusted diluted EPS, the U.S. firm added, will fall in the range of £8.37 and £8.53.

At the time of writing, the financial data and software company has a market cap of £9.07 billion and a price to earnings ratio of 31.48.

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