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Acxiom 3Q Profit Falls 62 Percent

2 min read

Acxiom Corp. of Little Rock said Tuesday that third-quarter profit fell 62 percent to $7.9 million as revenue dropped 2 percent to $280.8 million.

The company (Nasdaq: %%ACXM%%), which says it is refocusing on core database and marketing services business, said it increased free cash flow by 29 percent to $83 million during the quarter.

"We are pleased with our recent progress, notably our improved cash flow and earnings, but we still have much more to accomplish," Acxiom CEO and President Scott Howe said. "We have realigned and strengthened our management team, established a clear strategy and improved our operating visibility.

"Looking ahead, we have started the process of investing in new data analytics and product capabilities and must also seek to increase top line Marketing and Data Services growth. In addition, the team will also be focusing on improving the financial performance of our non-U.S. operations."

For the quarter, net earnings attributable to Acxiom fell 62 percent to $7.9 million or 10 cents diluted earnings per share, compared to $20.8 million or 25 cents diluted earnings per share during the same quarter last year.

Revenue dropped 2 percent to $280.8 million, compared to $287.9 million during the same quarter last year.

In a conference call with analysts, Howe said he wants Acxiom to focus more on its larger clients and improve margins on unprofitable clients. He described several techniques to handle the unprofitable ones.

"First, we can raise prices; second, we can change the way we serve those clients … and the third, what we don’t want to do, is just part ways with those clients," he said.

Over the next two years, Howe wants to increase investment in products by about $30 million annually, the majority of that investment going to research and development.

"These are now starting," he said. "Some new features have been designed and deployed for a small handful of clients to test before a mass market release."

How also said the company is seeking a chief product officer, who would have a "strong track record of designing innovative products and bringing them to market quickly," Howe said.

Also Tuesday, the company hired its first chief revenue officer, former MySpace executive Nada Stirratt.

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