Stock trading in red: IHS Markit Ltd (NYSE: INFO)

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IHS Markit Ltd (NYSE: INFO) stock fell over 1.2% on 24th June, 2020 (As of 12:51 pm GMT-4; Source: Google finance) after the company’s net income for the second quarter to May 31 fell to $71.7 million, from $149.8 million, in the year-ago period. The company has posted mixed results for the period. At the end of the second quarter, the company’s debt balance was $5.4 billion, and represented a gross leverage ratio of approximately 3 times on a bank covenant basis & 2.9 times net of cash. The company closed the second quarter with $208 million of cash and the Q2 undrawn revolver balance with about $750 million representing a great liquidity position. In Q2, the company closed a very small acquisition that extends the Derivatives processing capabilities within APAC and made a small investment in an AI-based retail fuel pricing solution. In June, the company had also divested the small product tear down business within TMT.

INFO in the second quarter of FY 20 has reported the adjusted earnings per share of 69 cents, beating the analysts’ estimates for the adjusted earnings per share of 67 cents, according to the FactSet consensus. The company had reported 10 percent fall in the adjusted revenue to $1.03 billion in the second quarter of FY 20, beating the analysts’ estimates for revenue of $1.05 billion. The second quarter normalized organic decline was of 3% included recurring organic growth of 1% and non-recurring organic decline of 26%. This decline in non-recurring was mainly due to a tough year-on-year comp in Financial Services, lower OEM auto activities and lower Energy Consulting.

Moreover, Financial Services segment posted the organic growth of 3%, including 6% recurring in the quarter. Information and Processing had delivered 7% and 8% organic growth respectively, while Solutions had posted a 3% organic decline due to a difficult comp to prior year’s quarter and lower software and consulting delivery driven by COVID delays. The Transportation segment delivered normalized organic fall of 16% in the second quarter, including a decline of 10% recurring and a decline of 31% in non-recurring, mainly due to the delays in digital marketing, recalls and the retail portion of the Used Car business. The resources segment had posted 1% organic decline normalized for events which is comprised of 1% recurring growth and 15% in non-recurring declines.

Additionally, in the second quarter, the company repurchased 252 million of shares in the quarter including completing the $215 million Q2 ASR at an average price of $62.20. Year-to-date, the company’s share repurchase was of $852 million.

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