LITTLE ROCK — Net income more than doubled at Acxiom Corp. in its fiscal first quarter of the year, the Little Rock-based interactive marketing services provider said Wednesday.
Earnings were $9.8 million in the quarter that ended June 30, up from $4.2 million from the corresponding period last year.
Earnings per share were 12 cents, beating the projection of 11 cents of four analysts surveyed by Thomson Reuters.
Acxiom stock closed down 18 cents to settle at $15.10 in trading on the Nasdaq exchange Wednesday.
Acxiom’s revenue for the quarter was $270.4 million, up5.6 percent from $256 million in the first quarter last year.
Acxiom turned most of its increased revenue into profits, John Meyer, Acxiom’s chief executive officer and president, said in a prepared statement.
The company was able to convert revenue into income because of its efforts in the past two years to become more efficient, Meyer said in the statement.
“Because we continue to sign new business and invest in [research and development] throughout the recession, we’re now seeing existing customer relationships expand and new customer relationships also expand,” Meyer said in the company’s conference call.
Acxiom has had increases in business with retail and manufacturing companies, and in its background-screening business, Meyer said. Acxiom gained more business from existing customers such as retailers Macy’s and Zales, and financial firms Wells Fargo and First National Bank of Omaha, Neb., Meyer said.
The outlook is “the strongest it’s ever been” since Meyer took the top position 2 1 /2 years ago, he said.
Internationally, Acxiom is “experiencing uneven economic recovery,” Meyer said.
Daniel Leben, an analyst with R.W. Baird & Co. in Milwaukee, said in a report written Wednesday that he is pleased with actions taken by Meyer to eliminate costs for Acxiom, which puts the firm in position to improve its profit.
Leben, who has a neutral rating on Acxiom stock, owns no stock in the company. Baird expects to seek investment banking business from Acxiom this year.
Leben cautioned that Acxiom’s business does face risks to its success.
“Economic weakness adversely affects advertising and technology spending, both of which are key demand drivers for Acxiom’s services,”Leben wrote.
Leben also wrote that Acxiom is “heavily dependent” on its proprietary AbiliTec software technology.
“Failure to update this technology or the introduction of competing technologies could reduce Acxiom’s competitive advantage, thus impacting its operations,” Leben wrote.
Business, Pages 23 on 07/29/2010