Verisk (VRSK) Beats Earnings and Revenue Estimates in Q4

Verisk Analytics Inc. VRSK reported better-than-expected fourth-quarter 2022 results.

Adjusted earnings (excluding $1.04 from non-recurring items) were $1.43, beating the Zacks Consensus Estimate by 22.2%. Such a beat was supported by strong segmental revenue growth and core operating leverage. Adjusted earnings decreased 2.7% on a year-over-year basis.

Total revenues of $630 million surpassed the consensus estimate by 2.4% but decreased 17.7% from the year-ago figure. The reduced top line can be correlated to the sale of the company’s environmental health and safety business (“3E”) and Financial Services segment.

Verisk underperformed its industry in the past year. Verisk has lost 5.8% in the past year compared with the industry’s 4.8% decline.

Verisk Analytics, Inc. Price, Consensus and EPS Surprise

Verisk Analytics, Inc. price-consensus-eps-surprise-chart | Verisk Analytics, Inc. Quote

Quarter Details

Underwriting and rating revenues saw an uptick of 11.4% to $444.4 million. Claim revenues increased to $186 million, indicating an increase of 13.2% on a year-over-year basis.

With the energy and Specialized Markets segment qualified as discontinued operations, there were no revenues from the segment. Verisk Financial Services was sold in April 2022 and no revenues for the segment are accounted for.

Adjusted EBITDA grew 4.1% on a year-over-year basis to $332 million. The adjusted EBITDA margin was at 52.7%, increasing 210 basis points from the year-ago figure.

Balance Sheet & Cash Flow

The company exited the fourth quarter with $292.7 million, up from $276.8 at the previous quarter end. Long-term debt was $2.34 billion, flat with the prior-year quarter’s level.

Verisk Analytics generated $249 million in cash from operating activities in the quarter. The free cash flow generated by the company in the quarter is $169.3 million. The increase is primarily related to the prior-year settlement of the EVT litigation, partially offset by the sale of 3E and the Financial Services segment. Capital expenditure was pegged at $79.7 million for the fourth quarter.

Dividend and Share Repurchase

During the reported quarter, the company paid out $48 million through cash dividends.

In the quarter, the company repurchased 2.4 million shares worth $428.6 million at an average price of $179.82. Out of the previously obtained share repurchase authorization, the company still has a balance of $441.3 million.

On Feb 14, 2023, the board of directors of the company approved a 9.7% increase in the cash dividend to 34 cents per share issued and outstanding, payable Mar 31, 2023, to shareholders of record as of Mar 15, 2023.

Verisk Analytics currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The following stocks from the Business Service sector reported better-than-expected fourth-quarter results.

Gartner, Inc. IT, currently carrying a Zacks Rank #3 (Hold), reported better-than-expected fourth-quarter 2022 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings (excluding 49 cents from non-recurring items) per share of $3.70 beat the Zacks Consensus Estimate by 44% and increased 23.8% year over year. IT’s revenues of $1.5 billion beat the Zacks Consensus Estimate by 2.6% and improved 15.2% year over year on a reported basis and 20% on a foreign-currency-neutral basis.

Aptiv PLC APTV, currently carrying a Zacks Rank of 3, reported better-than-expected fourth-quarter 2022 results. Adjusted earnings (excluding 41 cents from non-recurring items) of $1.27 per share beat the Zacks Consensus Estimate by 6.7% and increased more than 100% on a year-over-year basis. APTV’s revenues surpassed the Zacks Consensus Estimate by 6% and increased 12.2% year over year.

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