TransUnion (NYSE:TRU), a major player in the credit bureau sector, witnessed a significant drop in its stock price on Tuesday, following its Q3 sales and earnings falling short of analyst predictions. The company reported adjusted earnings of $0.91 per share with sales totaling $969 million, leading to a 26% decrease in stock value Tuesday.
Despite recording a 3% YoY revenue growth, with U.S. revenue growth at 2% and international at 12%, TransUnion disclosed a GAAP loss of $2.07 per share. This loss is associated with a substantial $495 million non-cash goodwill impairment expense for its struggling United Kingdom reporting unit.
Management at TransUnion has indicated that this underperformance in the UK, combined with the global trend of declining lending and marketing activity, is likely to negatively impact short and midterm results. The revenue for the fourth quarter is now projected to be between $917 million to $932 million, while adjusted profits are anticipated to range from $0.67 to $0.72 per share.
In Q3 2023, TransUnion's earnings of $0.91 per share marked a -4.21% surprise against the Zacks Consensus Estimate, and a decline from last year's $0.93 per share and year-ago revenues of $938.2 million. Despite the downturn, TransUnion has outperformed EPS estimates twice recently and its shares have risen by 14.3% YTD, surpassing the S&P 500's 9.8% increase.
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