FactSet Profit Tops Estimates as Sales Rise

Updated from 8:17 a.m. EDT

Up and up across the board mostly. That's what FactSet Research(FDS) said in its third-quarter earnings report before the opening bell Tuesday.

The Norwalk, Conn., concern said earnings rose to $38.5 million from $32.5 million in the same period last year. Per-share earnings were 79 cents compared with 65 cents. Sales jumped nearly 5% in the third quarter to $154.4 million. Analysts' expected a little over $155.2 million.

Earnings were further enhanced by a tax benefit of 6 cents a share that the company realized after finalizing last year's tax returns and repatriating overseas earnings to the U.S. After excluding that, the company beat analysts' estimate of 72 cents by a penny.

Thanks also can be given to a leap in operating margins to 34.5%.

Still, not all was great. The company said that annual subscription value for its services dropped by $8 million in the third quarter to $615 million, while users fell off 1,600 to 37,100.

Shares surged just after the morning bell, but gave up gains and were down 2.6% by the early afternoon.

"Against the backdrop of a difficult selling environment, FactSet again delivered double-digit EPS growth while continuing to invest for the future," CEO Philip Hadley said in a statement. "I'm pleased that our fiscal 2009 plan forecasts headcount growth of more than 20%, which we believe will position the company to be even stronger coming out of this global recession."

FactSet, which provides financial data to investment managers and banking clients, also gave fourth-quarter guidance, saying that revenue should land between $152 million and $157 million, with earnings of between 73 cents to 75 cents a share.

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