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Why Dun & Bradstreet (DNB) Is Down Today

NEW YORK (TheStreet) -- Dun & Bradstreet  (DNB) was falling 10.2% to $95.67 Tuesday after the company announced its fourth-quarter results that missed estimates.

For its fourth-quarter, the company posted earnings of $2.75 a share. Analysts surveyed by Thomson Reuters estimated earnings of $2.82 for the quarter. Revenue for the quarter was up 3% to $467.7 million, though that still missed analyst estimates of $468.7 million.

Net income fell 22% in the quarter because D&B took charges when it wrote off assets in an effort to cut costs. The company also had to pay legal fees after a Chinese court fined a unit for illegally buying information about Chinese consumers.

TheStreet Ratings team rates DUN & BRADSTREET CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate DUN & BRADSTREET CORP (DNB) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 35.70% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DNB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • DUN & BRADSTREET CORP has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DUN & BRADSTREET CORP increased its bottom line by earning $6.48 versus $5.30 in the prior year. This year, the market expects an improvement in earnings ($7.70 versus $6.48).
  • Net operating cash flow has slightly increased to $64.60 million or 1.73% when compared to the same quarter last year. In addition, DUN & BRADSTREET CORP has also modestly surpassed the industry average cash flow growth rate of -0.27%.
  • The gross profit margin for DUN & BRADSTREET CORP is rather high; currently it is at 67.92%. Regardless of DNB's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DNB's net profit margin of 17.70% significantly outperformed against the industry.
  • DNB, with its decline in revenue, underperformed when compared the industry average of 18.5%. Since the same quarter one year prior, revenues slightly dropped by 0.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: DNB Ratings Report

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