Leading analytics and software-as-a-service provider Acxiom Corporation (ACXM - Analyst Report) reported lackluster fourth-quarter fiscal 2015 results with GAAP loss of $6.0 million or loss of 8 cents per share, compared with loss of $29.2 million or loss of 38 cents per share in the year-ago period. The year-over-year improvement in reported loss despite lower revenues was primarily due to comparatively lesser operating expenses.

Non-GAAP earnings for the reported quarter were 24 cents per share versus 26 cents in the year-ago quarter. The adjusted earnings (with stock-based compensation adjustments) of 13 cents per share for the quarter badly missed the Zacks Consensus Estimate of 19 cents.

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For fiscal 2015, Acxiom reported GAAP loss of $11.0 million or loss of 14 cents per share, as against net income of $8.9 million or 12 cents per share in fiscal 2014. The GAAP loss in the reported fiscal was largely due to expenses associated with business separation and transformation activities, non-cash compensation, acquired intangible asset amortization, as well as decline in IT Infrastructure Management Services segment revenue. Non-GAAP earnings for the reported fiscal were 78 cents per share versus 95 cents in fiscal 2014.

Revenues    

Total revenue for fourth-quarter fiscal 2015 was $257.4 million, down 4.2% year over year due to a decline in IT Infrastructure Management Services segment revenues. Revenues for the reported quarter missed the Zacks Consensus Estimate of $262 million.

By segments, sales from the Marketing and Data Services segment decreased 1.9% year over year to $205.7 million. IT Infrastructure Management Services segment revenues were down 12.2% to $51.6 million.

Operating loss for the reported quarter was $4.6 million compared with an operating loss of $11.5 million in the prior-year quarter due to impairment of goodwill charges recorded in the year-ago quarter.

Significant Developments in the Quarter

Acxiom signed 20 new connectivity agreements during the quarter. The company joined the newly renamed Facebook Marketing Partners Program, which would give Facebook, Inc. (FB - Analyst Report) marketers easy access to Acxiom’s audience data and onboarding capabilities. Acxiom also expanded its global data partnership with Twitter, Inc. (TWTR - Analyst Report), which would enable advertisers to leverage Acxiom’s third-party data to extend their advertising reach.

Subsequent to the end of the quarter, Acxiom inked a definitive agreement with Charlesbank Capital Partners and M/C Partners to divest IT Infrastructure Management business for a consideration of up to $190 million. The divestiture is part of Acxiom’s strategic initiatives to realign its operations and increase focus on core Marketing and Data Services business to strengthen foothold in onboarding and connectivity markets.

Balance Sheet and Cash Flow

At fiscal-end 2015, Acxiom had cash and cash equivalents of $141.0 million compared with $418.6 million in the prior-year period. Long-term debt aggregated $254.5 million at fiscal-end 2015 compared with $289.0 million at fiscal-end 2014.

Net cash provided by operating activities aggregated $34.5 million during the quarter compared with $40.7 million in the prior-year period, bringing its tally for fiscal 2015 to $104.8 million compared with $163.2 million for fiscal 2014. Free cash flow to equity stood at negative $10 million for fiscal 2015 compared with $76 million in the prior-year period due to lower operating cash flow and higher capital expenditures.

During the reported quarter, Acxiom did not repurchase any shares. Since Aug 2011, the company has repurchased 12.9 million shares or about 16% of the outstanding stock for $202 million under the share repurchase program.

Outlook

For fiscal 2016, revenues are expected to be within $815 million and $840 million. Earnings are expected in the range of 45 cents to 50 cents per share. This guidance includes the impact of the divesture of the IT Infrastructure Management business, which will be reported as a discontinued operation in the first quarter of fiscal 2016.

Acxiom currently has a Zacks Rank #3 (Hold). Another stock that looks promising and is worth a look includes Barracuda Networks, Inc. (CUDA - Snapshot Report), carrying a Zacks Rank #2 (Buy).

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