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IHS posts 15% Q3 profit growth, beats Street

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Information and analytics provider IHS (NYSE:IHS) announced Wednesday it boosted its third quarter profits by almost 15% as its acquisitions provided 19% sales growth.

For the three months ending August 31, IHS, which provides a wide variety of analytic and forecasting softwares, reported net income of $39.6 million, or $0.60 per share, up from $34.6 million, or $0.53 per share, a year ago.

Adjusted to exclude a stock-based compensation expense, acquisition costs and restructuring charges, earnings were $0.88 per share, above analysts' $0.81 per share expectations.

Revenues rose 24% to $340.5 million. Analysts were expecting $335 million in sales.

"We delivered another quarter of strong profitable growth in this time of ever greater economic uncertainty," said CEO Jerre Stead.

"With the closing of our largest acquisition in our company's history, SMT, and the successful first release of our Vanguard initiative, we continue to make important investments in scalable platforms which will help us deliver strong profitable growth for years to come."

For the full year fiscal 2011, IHS stood by its earlier outlook and said it expects revenues between $1.307 and $1.337 billion, and earnings in the range of $3.33 and $3.43 per share, in line with Street estimates.

In this latest quarter, revenues from IHS products rose 23% to $295.3 million, while revenue from subscriptions increased 26% to $263.9 million.

Service revenues improved 41%, while consulting sales hiked 49%, partially offset by transaction revenues, which shed 21%.

Revenues increased 22% in the Americas, 26% in Europe, the Middle East, and Africa (EMEA) and a whopping 47% in the Asia-Pacific (APAC) region.

In other news, IHS predicted slowing growth in the semiconductor industry. The company now expects the sale of semiconductors to rise 2.9% in 2011, reaching $313.3 billion. The prior outlook in August was for revenues to rise by 4.6% to $444.6 billion.

VP of electronics and semiconductors, Dale Ford, commented: "Mounting economic weakness is taking its toll on the worldwide electronics and semiconductor industries just as these markets are entering the critical pre-holiday sales season."

IHS' shares fell 4.74% to $76.10 as of 3:32 pm EDT. Based in Englewood, Colorado, IHS has made nearly ten major acquisitions, most recently including Toronto-based industry peer Dyadem International in April, market and business advisory firm Chemical Market Associates in May, and geoscience software company Seismic Micro-Technology in August.

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