Interactive Data Corporation (NYSE: IDC) today reported preliminary financial results for the third quarter ended September 30, 2008. Based on its review to date, Interactive Data’s third-quarter 2008 revenue is expected to be approximately $188.6 million, which would represent a 7.7% increase over third-quarter 2007 revenue of $175.0 million. Income from operations is expected to be approximately $53.7 million for the third quarter, which would be 12.2% higher than $47.9 million in the same quarter one year ago. Net income is expected to be approximately $36.7 million, or $0.38 per diluted share, compared with $39.3 million, or $0.40 per diluted share, in the third quarter of 2007.
“We believe that our preliminary third-quarter 2008 results illustrate the stability, resilience and predictability of our business,” stated Stuart Clark, president and chief executive officer. “We expect that our revenue growth of 7.7%, combined with prudent expense management, will produce an increase of approximately 12.2% in income from operations. Our organic revenue growth, which excludes approximately $1.1 million in unfavorable foreign exchange effects and approximately $1.3 million in revenue from the Kler’s business we acquired in August 2008, is expected to be approximately 7.6%. Our organic revenue growth was primarily the result of sustained expansion at our Pricing and Reference Data business, as well as a good performance at our Real-Time Services business. We anticipate that our third-quarter 2008 effective tax rate will be approximately 33.9% versus 21.7% in last year’s third quarter, which was extraordinarily low due to the impact of a number of discrete, one-time items. The difference between the effective quarterly tax rates on our net income performance is more than $6 million. We expect to end the third quarter of 2008 with approximately $239 million in cash, cash equivalents and marketable securities, and no debt.”
Clark continued, “Despite the obvious disruptions that occurred in the market in September, we produced positive net new business in all three months of the quarter at levels that were generally in line with or better than our plans entering the quarter. We believe our continued success in the marketplace reflects the compelling value proposition we deliver to support our customers in mission critical areas such as valuation, risk management, compliance, trading operations and wealth management. We view these areas as either non-discretionary for customers or fundamental to their future growth and success. For these reasons, we also believe we are well positioned to continue servicing our institutional customers involved in recent mergers and acquisitions.”
Clark concluded, “Given the current volatility in the financial markets and in the interest of being as transparent as possible with regard to our financial reporting in these circumstances, we believed it was important to share preliminary results for the third quarter of 2008 as soon as it was practical to do so. With the third quarter behind us, we are on a clear path to either achieve or exceed the revised 2008 financial targets that we issued in July, and we have updated our outlook accordingly. Although we expect that the current environment will bring additional challenges, it is also creating some unique opportunities for us. The planning process for 2009 is underway and our expectation is that we will continue to grow through a combination of organic expansion and acquisitions.”