Solera Holdings Inc. (SLH) reported second-quarter 2009 earnings on Feb 4 that beat Wall Street estimates by 8.82%, or 3 cents per share.

It was the fourth consecutive earnings surprise for the company.

Solera Holdings provides software and other services to the automobile insurance claims processing industry in over 50 countries. The company processes nearly $20 billion in claims for 55,000 customers each year.

Revenue fell 0.6% to $131.3 million from $132.1 million a year ago but after adjusting for foreign currency exchange rates it rose 10.3%. Net income climbed 39.6% to $26.1 million from $18.7 million in the prior year period.

Even with the tough global economic conditions, Solera grew the number of claims it processed year-over-year and increased revenue per-claim.

2009 Outlook

The strengthening US Dollar over the past few months has been a boom to Solera. Given this strength, the company updated its 2009 financial guidance with revenue forecasted higher in the range of $549 to $553 million from previous guidance of $530 to $535 million.

SLH reaffirmed EPS between $1.56 to $1.60 per share.

Value Fundamentals

When we last reviewed Solera on Nov 14, it was a Zacks #1 Rank (strong buy) stock. It has since fallen to a Zacks #2 Rank (buy) stock.

SLH is trading at 13x forward earnings. It has a price-to-book of 3.12. The company has an outstanding 1-year return on equity (ROE) of 18.84%.

Content Courtesy: Zacks Investment Research

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