First Advantage Sinks

First Advantage(FADV), consumer credit information provider, said its second-quarter earnings rose 36.2% from the year-ago period, on strong revenue growth.

The St. Petersburg, Fla.-based company earned $16.64 million, or 29 cents a share, in the quarter, compared with $12.22 million, or 23 cents a share, a year ago. Second-quarter earnings include share-based compensation expense of 4 cents a share. Analysts surveyed by Thomson First Call were expecting earnings of 29 cents a share in the most recent quarter.

Second-quarter revenue rose 25.5% from a year-ago period to $205.12 million as against analysts' expectation of $205.85 million.

The company expects to earn 27 cents a share to 31 cents a share in the third quarter on revenue of $200 million to $210 million. Adjusted earnings are expected to be 30 cents a share to 34 cents a share in the second quarter. Analysts are expecting earnings of 33 cents a share on revenue of $213.94 million in the second quarter.

"First Advantage continued to perform well in the second quarter of this year, underscoring the importance of the continued execution of our strategic growth strategy," said the company. "We are particularly pleased with our margin and EBITDA improvements. Operating margins, excluding the impact of share-based compensation expense, increased from the second quarter of 2005 in four of our operating segments: Lender Services, Dealer Services, Employer Services and Investigative and Litigation Support Services."

Second-quarter gross profit rose 25.8% from a year-ago period to $132.59 million and gross margin increased 14 basis points to 64.6%. Operating income for the quarter increased 37.3% to $33.29 million and operating margin increased 140 basis points to 16.2%.

Shares fell $1.78 to $18.70.

>To order reprints of this article, click here: Reprints