TransUnion stocks plummeted to a six-year low following the company's announcement of a reduction in its annual adjusted earnings guidance. The credit reporting firm reported a weaker-than-expected performance in the third quarter, causing shares to fall by 24% and reach its lowest level since October 2017.
Company Cuts Earnings Forecast
TransUnion revealed that it now anticipates adjusted earnings of $3.24 to $3.38 per share for 2023, down from its previous forecast of $3.49 to $3.62 per share. The adjusted earnings projection for the fourth quarter is expected to be between 67 cents and 72 cents per share, falling short of the current analyst estimate of 98 cents per share.
Disappointing Third Quarter Results
In the third quarter, TransUnion experienced a loss of $2.07 per share, a significant decline compared to the profit of 41 cents per share recorded during the same period last year. Adjusted earnings were reported at 91 cents per share, missing analyst projections by 4 cents.
Despite an increase in revenue from $938.2 million to $968.7 million year-over-year, the company's third-quarter revenue fell below the consensus estimate of $982.9 million provided by analysts polled by FactSet.
Reasons Behind the Outlook Cut
Chief Executive Chris Cartwright attributed the outlook cut to diminishing lending and marketing activity, particularly in the United States and the United Kingdom. TransUnion struggles with slowing volumes in these regions, leading to the need for a revised earnings forecast.
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