Interactive Data Corporation (NYSE: IDC) today reported its financial results for the second quarter ended June 30, 2010. Interactive Data’s second-quarter 2010 revenue was $194.0 million, a 4.9% increase over $185.0 million in the second quarter of 2009. Income from operations in the second quarter of 2010 was $35.5 million, compared with $50.6 million in the same period one year ago. Net income attributable to Interactive Data for the second quarter of 2010 was $25.2 million, or $0.26 per diluted share, compared with net income of $33.1 million, or $0.34 per diluted share, in the second quarter of 2009.
“Interactive Data’s second-quarter 2010 revenue growth of 4.9% primarily reflects improving organic revenue performance as well as the contribution from our recent acquisitions,” stated Ray D’Arcy, Interactive Data’s president and chief executive officer. “We continue to be pleased with the ongoing strength displayed within our fixed income evaluations and reference data services, particularly in the U.S. In addition, we continued to experience growth in our web-based solutions and fixed income analytics product areas. Our overall progress was partly offset by challenges that persist in certain parts of our business, such as our eSignal services for active traders and our real-time market data services. We maintained solid underlying profitability in the second quarter of 2010, although a number of factors resulted in higher operating costs and make comparisons difficult with income from operations in the second quarter and first six months of 2009.”
The following factors impacted Interactive Data’s 2010 second-quarter income from operations performance and affect comparability with prior-year periods:
- $11.9 million in second-quarter 2010 costs related to the Company’s previously announced agreement to be acquired by Silver Lake and Warburg Pincus;
- Higher expenses related to certain incentive bonus compensation programs that are now in place after being substantially reduced in the second quarter of 2009 primarily because certain financial targets were not met last year. In addition, annual merit-based salary increases were implemented in January 2010 after being eliminated in 2009;
- Higher depreciation and amortization expense, the impact of costs associated with recently acquired businesses, and the phasing of hiring to expand the Company’s fixed income evaluated pricing organization during the second half of 2009; and
- An out-of-period accounting adjustment of $10.9 million that decreased second-quarter 2009 revenue by approximately $2.3 million and increased 2009 second-quarter total costs by approximately $8.6 million.
D’Arcy concluded, “Since announcing our agreement to be acquired by Silver Lake and Warburg Pincus in early May, we have made substantial progress toward completing this transaction and now anticipate that it will close within the next several weeks. We look forward to transitioning our ownership structure and we plan to work closely with Silver Lake and Warburg Pincus in ways that will enable us to continue expanding our business and delivering exceptional value to our customers worldwide.”