First Advantage Surges 16%

The stock rises despite a first-quarter earnings decline.
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First Advantage

(FADV)

, consumer credit information provider, said its first-quarter earnings fell 9.3% from the year-ago period, on share-based compensation expense.

The St. Petersburg, Fla.-based company earned $12.7 million, or 22 cents a share, in the quarter, compared with $14.0 million, or 27 cents a share, a year ago. First-quarter earnings include share-based compensation expense of $2.2 million. Analysts surveyed by Thomson First Call were expecting earnings of 22 cents a share in the most recent quarter.

First-quarter revenue rose 38.5% from a year-ago period to $194.3 million.

The company expects to earn 26 cents a share to 30 cents a share in the second quarter on revenue of $200 million to $205 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 29 cents a share on revenue of $201.6 million in the second quarter.

"We completed several strategic acquisitions in the first quarter of 2006, continuing to expand upon the depth and breadth of our product and service offerings, primarily in the Employer Services segment," the company said. "Our strategy continues to enable us to expand our operations in both the U.S. and the Asia-Pacific region as we garner additional market share."

First-quarter gross profit rose 38.6% from a year-ago period to $124.6 million and gross margin increased marginally five basis points to 64.1%. Operating income for the quarter increased 10.6% to $27.2 million. However, operating margin dropped 353 basis points to 14%.

By segment, first-quarter revenue from lender services segment rose 15.6% from a year-ago period to $45.3 million. Revenue from data services segment increased 90% to $35.9 million. Revenue from dealer services segment rose 51.8% to $29.6 million. Revenue from employer services segment moved up 32.8% to $39.7 million. Revenue from multifamily services segments increased 15.2% to $16.7 million and revenue from investigative and litigation support services more than doubled from a year ago period to $15 million.

Shares rose $3.67 to $26.49.

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