Acxiom Retooling Efforts After First Quarter ‘Bad Luck’

Acxiom Corp. saw revenues slide and earnings hold close to unchanged, as company leaders disclosed a string of lost business and efforts to turn around its “bad luck.”

The Little Rock-based data marketer and management company reported first quarter earnings of $13.18 million, or 17 cents per diluted share, compared to $13.33 million, or 17 cents per diluted share, one year ago.

Revenues dipped from $271.66 million in last year’s first quarter to $266.19 million in the most recent period.

Acxiom CEO Scott Howe started the company’s investor conference call with an ominous disclosure.

“I’m going to start today’s call with some bad news,” Howe said. “I want to talk about a setback we have had in the IT Infrastructure business. Over the past few months, we have experienced some significant customer losses. In our 10-K, we talked about termination notices and the associated customer revenues. Unfortunately, since our filing, we have been notified of an additional termination. The reasons for the overall losses differ. Two were basically bad luck, where customers decided to take their IT infrastructure in-house as part of being acquired by a third party.”

“The other 4 situations where we lost the competitive bids in our services were just not renewed. This is obviously not the result we worked for, nor is it acceptable,” Howe added.

He said the company would “redouble” its efforts to serve its ITO (Information Technology Outsourcer) customers.

“This remains priority one. To each of our customers, we want you to know, we are fully dedicated to your long-term success. Second, we have retooled our ITO sales and marketing efforts and now have several new prospects in our pipeline. That said, these are folks that have laid dormant for several years, so even though we have more prospects in the pipeline, rebuilding a cadence of growth will take time,” Howe said.

“Finally, as we’ve talked about before, we are revamping our ITO innovation. We recently introduced the Acxiom PrivateCloud, which leverages our existing infrastructure with a superior combination of service, storage and flexibility. Our ITO customers also benefit from our proven experience in security and data privacy. In addition, we have launched the Acxiom Private Portal, which allows existing customers to see a performance dashboard on either their desktop or mobile device. In short, it makes it easier for our clients to manage their outsourced IT,” he said.

Acxiom has three primary revenue silos: IT infrastructure management, marketing and data services, and other services.

• The company’s IT segment posted quarterly revenue of $69.39 million, down from $70.29 million one year ago.
• Marketing and data provided $187.79 million, down from $192.48 million last year.
• Other services accounted for $9.02 million, up from $8.88 million a year ago.

Acxiom did score some new clients in its marketing and data services division during the quarter, and it said in September it was launching a new technology for data marketing and insights called Acxiom Audience Operating System.

“We believe our technology is groundbreaking and will re-define marketing,” said Howe. “For the first time marketers, agencies and publishers will have one to one marketing capabilities at scale across all channels and devices.”

Acxiom shares (NASDAQ: ACXM) closed trading at $25.77 on Wednesday. The company’s stock has traded between $15.72 and $26.47 per share during the past 52 weeks.