Equifax stock falls as company says it's feeling effect of weaker mortgage demand
By Bill Peters
Credit-scoring company cites 'strong non-mortgage revenue growth' however
Shares of Equifax fell after hours on Wednesday after the credit-scoring giant forecast second-quarter revenue that missed expectations and said it expected a continued drop in mortgage inquiries this year.
The company, one of the three big ones that rates borrowers' credit quality for lenders, made that forecast as the housing market stalls out under high home prices and interest rates.
Equifax (EFX) said it expected second-quarter revenue of $1.41 billion to $1.43 billion. That was below FactSet forecasts for $1.44 billion.
The company said it was sticking with its full-year forecast for sales of $5.72 billion and adjusted earnings per share of $7.35. However, the company said its outlook "reflects an expectation of a decline of about 11% in our 2024 U.S. mortgage-credit inquiries."
For its first quarter, Equifax reported net income of $124.9 million, or $1 a share, compared with $112.4 million, or 91 cents a share, in the same quarter last year. Adjusted earnings per share came in at $1.50.
Equifax reported revenue of $1.389 billion, up 7% year over year.
Analysts polled by FactSet expected adjusted earnings per share of $1.44, on revenue of $1.4 billion.
Shares fell 9.5% after hours on Wednesday.
The company said that its non-mortgage revenue amounted to about 80% of revenue overall during the quarter. Chief Executive Mark Begor said outside of mortgages, the business remained strong.
In the company's earnings release, he said: "We have strong momentum in 2024 and are confident in the future of the new Equifax as we deliver strong non-mortgage revenue growth, move towards completion of our cloud transformation, leverage our new cloud capabilities to accelerate new product roll-outs that 'only Equifax' can provide, and invest in new products, data, analytics and AI capabilities, which are expected to drive growth in 2024 and beyond."
-Bill Peters
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(END) Dow Jones Newswires
04-17-24 2052ET
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