Data collator Acxiom (NASDAQ:ACXM) reports its fiscal Q1 2007 earnings tomorrow after close of market. In honor thereof, let's do a little collating of our own and review the company's recent numbers.

What analysts say:

  • Buy, sell, or waffle? Eleven analysts follow Acxiom today, which is two more than there were last quarter. Buy ratings have doubled to four, and there are still seven holds.
  • Revenues. Wall Street will be looking for 7% sales growth tomorrow, and $332.6 million in total revenue.
  • Earnings. Profits are predicted to more than double to $0.17 per share.

What management says:
A couple weeks ago, Acxiom filed an investor presentation with the SEC, mainly in order to argue for election of Acxiom's slate of board of director nominees (in preference to a slate proposed by ValueAct Capital, a firm that wants to buy the company). As a result, the presentation is heavier than usual on the virtues of existing management in general, and its favored director nominees in particular.

Aside from the political polemics, the presentation includes information of more general interest to investors. For example, it lays out several markets that Acxiom aims to target over the next five years, among them: business information, risk mitigation, and online advertising. It also outlines international expansion plans in Canada, Latin and South America, and the Asia Pacific regions. In total, the planned expansions seem to be targeting approximately $750 million in additional revenues within five years, suggesting that by 2011, Acxiom could be making in excess of $2 billion in annual sales (about 50% more than today).

What management does:
Recent trends in Acxiom's margins suggest that those potential additional sales could also be more profitable. Although the company currently sports operating and net margins lower than it achieved 18 months ago, the last two quarters showed a marked turnaround in the trends. Rolling gross, operating, and net margins are all higher today than they were six months ago.

Margins %

12/04

3/05

6/05

9/05

12/05

3/06

Gross

25.5

25.9

24.8

24.6

25.6

26.4

Op.

11

10.2

8.8

8.4

9.2

10.6

Net

6.0

5.7

5.1

4.1

4.3

4.8

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
The company's focus on controlling costs has been crucial to margin improvement. Over the last six months, for example, as sales rose 9% year over year, Acxiom kept expenses under a tight rein, allowing operating costs to rise at only half that rate.

According to the investor presentation, the firm has focused on standardizing its computer platforms in order to reduce the cost of doing business, and the results are positive. In one chart, Acxiom describes its costs at a "micro" level rarely seen in company descriptions of its business: "computer and related expenses" as a percent of revenues. There, Acxiom claims that computer-related costs ate up 31% of revenues in 2003, and have dropped steadily to the present point, where they account for only 22% of revenues.

I doubt we can expect to see this level of detail in tomorrow's report, but clearly the firm sees cost-control as key to its long-term plans. If they wish to keep tabs on management's progress, investors should therefore pay close attention to operating costs in future quarters.

Competitors:

  • InfoUSA (NASDAQ:IUSA)
  • Harte-Hanks (NYSE:HHS)
  • Equifax (NYSE:EFX)
  • Fair Isaac (NYSE:FIC)
  • Dun & Bradstreet (NYSE:DNB)
  • ChoicePoint (NYSE:CPS)

Speaking of Acxiom's progress, you can monitor how it's been doing in recent quarters by flashing back to our past reports:

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Fool contributor Rich Smith does not own shares of any company named above.