Revenue, Margins Slip At Acxiom
Acxiom Corp. generated $271.1 million during its fiscal second quarter for 2010, a 17.6% drop from $328.9 million in the second quarter of fiscal 2009. The company’s operating income fell by 38% during the same period, from $34.3 million to $21.2 million, and its net earnings dropped by 40.4%, from $15.8 million to $9.4 million. The quarter ended Sept. 30.
Much of the revenue and earning plunges came from the company’s information products offerings, as opposed to its information service offerings. Information services revenue dropped from $236.7 million to $210.2 million, while its operating income fell from $25.6 million to just under $20 million.
But information products revenue dropped from $94.4 million to $60.9 million, although this segment showed income of $1.2 million, compared to an operating loss of $628,000 year ago.
Overall, Acxiom’s profit margin was 7.8%, with services generating margins of 9.5% and products pulling margins of 2.1%. There may be some good news in the offing.
“…[S]everal of our clients have indicated to us that they expect to increase their marketing spending during the second half of our fiscal year,” Acxiom CEO and president John Meyer said in a statement.
The Hegemonist’s Take: Meyer made several references to Acxiom’s overseas operations during an earnings teleconference. “One area that is still a concern is our European business, especially the UK, where our product business remains under pressure,” Meyer said. “We are seeing many UK customers cut back or delay campaigns causing several of our smaller competitors to go out of our business, and all of this being made worse by a protracted postal strike.” But he also held out hope for the Middle Eastern and Northern African markets, where “we announced our expansion…with the acquisition of DMS, or Direct Marketing Services, in the kingdom of Saudi Arabia and United Arab Emirates. What’s most exciting about this developing market is where less than 1% of the $3 billion in advertising spend goes towards the targeted marketing like the services Acxiom provides. As the only full service marketing services group in that area, DMS gives us an attractive entry point into a region of 300 million people.”
