Equifax shares fall 5% on weak guidance despite Q3 beat

ATLANTA - Equifax Inc . (NYSE:EFX ) reported third-quarter earnings that narrowly beat analyst estimates, but shares fell 5.2% in after-hours trading as the credit reporting agency issued softer-than-expected guidance for the fourth quarter.

The company posted adjusted earnings per share of $1.85, edging past the consensus estimate of $1.84. Revenue came in at $1.44 billion, in line with analyst expectations and up 9% YoY.

However, Equifax's fourth-quarter outlook disappointed investors. The company forecast Q4 EPS of $2.08-$2.18, below the $2.20 consensus. It also projected Q4 revenue of $1.44-1.46 billion, short of analysts' $1.48 billion estimate.

"Equifax had a strong third quarter against our EFX2026 strategic priorities delivering revenue of $1.442 billion, up a strong 9%," said CEO Mark W. Begor. He highlighted 10% local currency growth in non-mortgage revenue, which comprised about 80% of total revenue in Q3.

The Workforce Solutions segment saw revenue rise 7% to $620 million, driven by 14% growth in Verification Services. USIS revenue increased 12% to $476.9 million, boosted by 36% growth in mortgage revenue. International revenue grew 9% on a reported basis to $344.9 million.

Equifax's U.S. mortgage business grew 17% in the quarter, with USIS mortgage credit inquiries up 1%. The company maintained its long-term revenue growth target of 8-12%.

Despite the solid Q3 results, the weak Q4 guidance appeared to overshadow the earnings beat, leading to the after-hours stock decline. Investors will likely seek more clarity on the outlook during the company's earnings call.

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Source: Investing.com