Equifax Cuts Outlook for the Year Amid Weak Mortgage Market

Equifax Inc. experienced a decline in shares during the extended session on Wednesday, following the credit-score agency's reduction of its outlook for the year. The company attributes this adjustment to a weak mortgage market that is expected to persist in the current quarter.

Share Drop and Revised Estimates

Equifax (EFX) shares plummeted by as much as 8%, compounding a 3.2% loss from the previous day's session, ultimately closing at $175.16.

CEO Mark Begor released a statement, stating that the company is revising its full-year earnings-per-share estimate from $6.98 to $6.67, as well as trimming its revenue forecast from $5.3 billion to $5.26 billion. This adjustment takes into account the impact of a weaker-than-expected U.S. mortgage market and foreign exchange, offset partially by the acquisition of Boa Vista Serviços.

Analysts surveyed by FactSet had predicted earnings of $6.90 per share on revenue of $5.3 billion.

Acquisition and Projections

In August, Equifax finalized its acquisition of Boa Vista Serviços, Brazil's second-largest credit bureau, in a deal valued at $640 million.

Begor anticipates that the weak U.S. mortgage market, coupled with high interest rates, will persist into the fourth quarter. As a result, Equifax now expects mortgage credit inquiries for the full year to decrease by approximately 34%, down more than 3 percentage points from their previous projections.

Third-Quarter Performance

For the third quarter, Equifax reported a net income of $162.2 million, or 39 cents per share, compared to $165.7 million, also 39 cents per share, in the year-ago period.

After adjusting for stock-based compensation and other items, Equifax disclosed adjusted earnings of $1.76 per share, up from $1.73 per share in the same quarter of the previous year.

Revenue increased to $1.32 billion from $1.24 billion year-over-year.

FactSet-analyzed analysts had predicted earnings of $1.78 per share on revenue totaling $1.33 billion.

Share Performance

Equifax shares have experienced a 9.9% decline year-to-date. In contrast, the S&P 500 (SPX) has seen a 12.4% increase during the same period.