Analysts Skeptical As Acxiom Works to Retain Global Presence

by Luke Jones  on Monday, Dec. 10, 2012 12:00 am  

Acxiom Corp.’s Chinese business, called ChinaLoop, has grown in size since its acquisition in 2004. Overall, however, Acxiom has struggled to make its international efforts profitable. (Photo by Jeff Hankins)

“Our goal of profitably running our international business is taking shape,” Howe said in October during an earnings conference call.

In response to a question by an analyst, CFO Warren Jenson said he wanted Acxiom’s international divisions to be profitable “by year end.” He said that the company was increasing coordination between its international clients and employees. Chief Product & Engineering Officer Phil Mui, who was hired in April, had also visited several of Acxiom’s international headquarters to “figure out how to better globalize our products,” Jenson said.

Howe added that the job of fixing the international companies meant “weaning ourselves off of unprofitable products and clients.”

The type of coordination going on at Acxiom, Howe said, “simply didn’t happen … a year or two ago.”

But Carter Malloy, an analyst for Stephens Inc. of Little Rock, said despite the company’s good intentions, Acxiom’s European operations have not improved since they were acquired in 2004.

They were already falling short by 2005. At its annual meeting in 2005, executives said the companies hadn’t met Acxiom’s “aggressive initial expectations.” Lee Hodges, then chief operations leader, expressed regret that Acxiom hadn’t anticipated how complex the European buyouts would be. Stemming from those difficulties, Acxiom chopped 250, or 4 percent, of its employees worldwide in mid-2005.

“It’s been years and years of spotty track records and sliding revenues with little to no profitability,” Malloy said. “It’s been a very, very long time since there was a quarter of Acxiom where their European business did well and had any type of good standout. The only type of standout was a bad standout.”

Malloy said Europe’s bad performance was from equal parts management, reseller relationships and sales execution, not to mention a tough European economy. Malloy said Acxiom’s international future is a mystery: Even though it’s been discussed over conference calls, the company hasn’t put forth much in the way of specifics beyond some management changes — like hiring Christian Peck as managing director of U.K. operations in June.

“They’ve had some management changes internationally, some tweaks in strategy for sure, but in terms of details, there hasn’t been anything loud or important thus far,” Malloy said.



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