FactSet Research Systems, Incorporated (FDS), a leading provider of financial data and information analysis software, based out of Norwalk, Connecticut, announced an 11% profit jump for its fiscal second quarter, over its prior year second quarter. The company credited the strong rise in profit to a sharp increase in subscriptions for its investment management business.
Profit rose from $26.5 million in its 2007 fiscal second quarter to $29.5 million for the 2008 quarter. This amounted to a jump from 52 cents per share to 59 cents per share, inspiring news for the stock investing community. When excluding one-time items, the company actually produced $31.1 million in earnings, or 62 cents per share. Sales were strong for the company, climbing 20.6%, from $116.3 million to $140.2 million.
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The 62 cents per share-adjusted earnings outpaced the 60 cents per share that had been predicted by analysts. Stock trading picked up as this surprise announcement gave the stock help in the minds of investors. The company said the reason for its strong sales growth was based on US price hikes and international sales growth.
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Covered call investment strategies and covered call investing may be lucrative with this stock as it also gave a strong outlook for its fiscal third quarter. It expects sales of $145 to $149 million, compared to analyst expectations of $143 million. The company did say its relationship with recently sold Bear Stearns could slightly impact sales.
With regular and after hours’ stock trading, FactSet’s stock jumped an incredible $8.66 following the earnings announcement. Investors using a stock portfolio tracker were probably excited to see the 19% jump in their share prices over the course of the day.
One-year price targets for the company are currently at $66 per share. This suggests the stock has even more room to climb. The company currently yields a 48 cent per share dividend, which adds to its appeal for long-term stock investing. Successful stock portfolio management relies on strong stock research. Traders seem to like the fundamentals of the company as well as its strong outlook.
Many investors had been concerned about the extent of FactSet’s reliance on business from Bear Stearns, given Bear Stearns recent bail out from bankruptcy, when it was purchased by JP Morgan, with aid from the Central Bank. Many stock market tips have recently encourage investors to tread cautiously in lieu of the business connection to the failing financial services company.
After FactSet indicated they had virtually dissolved most of its business ties to the company before it went under, investors dived into buy as quickly as they could. The nearly 20% spike in stock price was a strong indication that investors had been waiting to hear news about the relationship with Bear Stearns. They seem to have gotten the message they were hoping for.
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