Donnelley Financial Solutions Q3 profit beats estimates

By Reuters News


Overview

  • US compliance software provider's Q3 net sales rose 5.5% yr/yr, driven by software growth

  • Adjusted EPS for Q3 beat analyst expectations

  • Company repurchased 146,672 shares for about $6.9 mln in Q3


Outlook

  • Company sees Q4 net sales between $175 mln and $180 mln

  • DFIN expects Q4 adjusted EBITDA margin of 26% to 27%

  • Company forecasts Q4 capital markets transactional net sales of $50 mln


Result Drivers

  • SOFTWARE SOLUTIONS - Co said net sales growth was primarily driven by increased software solutions sales, especially from ActiveDisclosure

  • CAPITAL MARKETS ACTIVITY - Co said higher capital markets transactional revenue contributed to net sales growth as overall market activity improved compared to Q3 last yr

  • OPERATING EFFICIENCIES - Co attributed Adjusted EBITDA margin expansion to higher net sales and ongoing operating efficiencies


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Adjusted EPS

Beat

$1.07

$0.84 (3 Analysts)

Q3 EPS

$0.85

Q3 Adjusted Net Income

$26.80 mln

Q3 Net Income

$21.30 mln

Q3 Adjusted EBITDA

$54.40 mln

Q3 Adjusted EBITDA Margin

29.40%


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the professional information services peer group is "buy"

  • Wall Street's median 12-month price target for Donnelley Financial Solutions, Inc. is $62.00, about 16.7% above its October 28 closing price of $53.12

  • The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 8 three months ago


Reuters Recommended Reads

  • Oct 27 - S&P Global tops Q3 revenue estimates, raises FY growth outlook

  • Oct 27 - Credit bureau TransUnion Q3 revenue meets on segment growth

  • Oct 28 - Tenable Q3 revenue beats estimates; raises FY outlook


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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