Acxiom Keeps Firm Grip on Expenses

by Jamie Walden  on Thursday, Oct. 30, 2008 10:38 am  

In a conference call with analysts on Wednesday, Acxiom CEO John Meyer attributed the company's climbing profit in a period of lagging revenue to its discipline in expense management and operating efficiency.

In a conference call with analysts on Wednesday, Acxiom CEO John Meyer attributed the company's climbing profit in a period of lagging revenue to its discipline in expense management and operating efficiency.

Excluding extraordinary items, the company reported earnings of about $15.9 million, or 18 cents a share, up 20 percent from the same quarter last year.

Despite the climb in profit, the interactive marketing services company saw a drop of nearly 6 percent in revenue to $328.9 million.

"Even with the ongoing economic crisis, we're able to hold our own and we finished Q2 better than the street expected," Meyer said.

"This marks the second consecutive quarter of doing what we said we were going to do as we continue to set the expectations with our teams for consistent market performance."

This quarter marks Meyer's second full quarter at the helm of the company.

Belt Tightening

Acxiom trimmed corporate expenses to $17.2 million for the quarter, down from $19.4 million from the same quarter last year.

The company shaved the cost of services revenue to $181 million, down $10.5 million, which helped increase the company's gross margin from 21.9 percent to 22.5 percent.

Acxiom also carved out $2.7 million from capital expenditures. Expenditures from the quarter were $11.1 million, down from $13.8 million during the same quarter a year ago. The move seems to be in line with Meyer's strategy of a "capital-light" campaign, which he detailed during the first quarter.

"We are exercising discipline with our capital expenditures so that we can enjoy the benefits of a healthy cash flow," Meyer said.

Though the company's revenue isn't growing as he'd like, Meyer said, most of its clients are forging ahead with their marketing activities. He said 75 percent of the company's clients have long-term contracts, which helped during the recent market chaos.

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