January 31, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Acxiom (NASDAQ: ACXM ) have settled into a 6% loss today, after losing as much as 12% in early trading. Investors have reacted negatively to a mixed earnings report, which shows weak revenue for both the completed and the current quarter.
So what: Acxiom's revenue for its fiscal third quarter was reported at $273.1 million, below the $276.3 million expected by analysts. However, earnings per share topped the consensus, with Acxiom reporting $0.19 in adjusted EPS against the $0.16 sought by analysts. What seems to worry investors is that, in addition to a year-over-year revenue decline seen in the third quarter, Acxiom expects full-year revenue to be 2.5% below the prior year, at $1.1 billion -- very slightly lower than what analysts sought. Projected EPS for the full year matches the consensus estimate of $0.73.
Now what: Acxiom has already enjoyed a major growth spurt over the past half year, and it's now at multiyear highs. The company's muted guidance may be a good reason to jump out now before sentiment turns against the company, which has had erratic earnings for some time. Don't be rash, though -- dig deeper. Acxiom is still expecting a reasonable level of profit, and its P/E is as low as it's ever been.
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