ChoicePoint Swings to Profit in Third Quarter

Consumer data provider ChoicePoint (NYSE: CPS) Wednesday announced a return to profit in the third quarter of 2007. ChoicePoint offers a skiptracing solution to the ARM industry under the DEBTOR Discovery brand.

Alpharetta, Ga.-based ChoicePoint said that overall it turned a $1.25 million profit in the third quarter of 2007 compared to a net loss of $72.2 million for the third quarter of 2006. The company reported revenues of $270.8 million for Q3 2007, a 3.6 percent increase from revenues reported in Q3 2006.

ChoicePoint breaks out its revenue from several business lines, with its data/skiptracing product falling into the Financial and Professional Services segment. For the quarter, that segment saw revenues of $26.5 million, up 3.8 percent from revenues reported in the same period a year ago.

Although the company still actively markets its DEBTOR Discovery product to the banking and ARM industry, the company has been moving away from doing business with debt collectors stemming from a massive data breach which made the news in early 2005. The breach occurred when ChoicePoint sold consumer data to identity thieves posing as legitimate debt collectors. In the wake of the breach, ChoicePoint announced that it would be tightening its security measures and would do less business with firms such as collection agencies and private investigators. DEBTOR Discovery, however, still remains a popular product in the banking and ARM industry.

ChoicePoint noted that its company-wide results were a reflection of charges realized from discontinued operations. For example, the company decided to sell its iMap business, a unit geared toward government clients, in the third quarter and recorded a $48.8 million charge as a result of discontinuing operations in the unit. ChoicePoint does not have a buyer lined up for iMap as of yet.

Results from continuing operations were much rosier. For the third quarter of this year. the company reported net income of $32.3 million, or 44 cents per share, from continuing operations, compared to a loss of 42 cents per share in the year ago period. The results, however, did not meet analysts’ expectations for continuing operations, with Reuters reporting their polled analysts expecting 48 cents per share. Shares of ChoicePoint were down sharply in midday trading Wednesday, dropping around 6 percent to $38.