Solera Holdings Q4 Profit Down, But Results Beat View

(RTTNews) - Software provider Solera Holdings Inc. (SLH) on Thursday reported a 9 percent decline in profit for the fourth quarter from last year, as higher revenues were more than offset by an increase in costs and expenses. Both revenue and adjusted earnings beat analysts' estimates. However, the company forecast results for fiscal 2014 below analysts' expectations.

Solera provides software and services to the auto insurance industry. Geographically, EMEA revenues for the fourth quarter declined 6 percent from the year-ago quarter, while Americas increased 16 percent.

Revenues from insurance company customers increased 8 percent from the year-ago period to $99.3 million. Collision repair facility customers and independent assessors rose 7 percent and 2 percent, respectively. Revenues from automotive recycling, salvage and other customers surged 32 percent from last year.

WestLake, Texas-based Solera's net income for the fourth-quarter was $19.00 million or $0.27 per share, down from $20.80 million or $0.30 per share in the same period last year.

The decline in net income reflects higher stock-based compensation expense, increased acquisition and related costs resulting from recently-completed acquisitions, and additional interest expense resulting from the issuance of $400 million of additional senior unsecured notes in April 2012.

These were partially offset by a decrease in the company's reported income tax provision reflecting the release of $11.0 million of the valuation allowance on its Netherlands net deferred tax assets.

Excluding items, adjusted earnings for the quarter were $47.21 million or $0.68 per share, compared to $44.28 million or $0.64 per share in the year-ago period. On average, eight analysts polled by Thomson Reuters expected the company to earn $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 10 percent to $218.53 million from $198.38 million last year. Analysts had a consensus revenue estimate of $215.64 million.

The company's board of directors approved the payment of a quarterly cash dividend of $0.17 per share of outstanding common stock and per outstanding restricted stock unit. The dividends are payable on September 17 to stockholders and restricted stock unit holders of record at the close of business on September 5.

For fiscal 2013, Solera's net income declined to $93.88 million or $1.35 per share from $106.99 million or $1.51 per share in the previous year. Adjusted net income was $188.56 million or $2.73 per share, compared to $190.78 million or $2.71 per share last year. Revenue for the year increased 6 percent to $838.10 million from $790.21 million in the prior year.

Street expected the company to earn $2.70 per share for the year on revenues of $835.01 million.

Looking ahead to fiscal 2014, Solera forecast adjusted net income in a range of $158 million to $164 million or $2.28 to $2.35 per share, with revenues ranging between $882 million and $890 million. Analysts currently expect the company to report earnings of $2.70 per share for the year on revenues of $890.47 million.

SLH closed Thursday's trading at $55.03, up $0.51 or 0.94 percent on a volume of 150,420 shares.