Ebix (NASDAQ: EBIX) sells insurance industry software products and services in Asia, Australia, Europe and North America. This company is not your standard IT firm, however. The company's Ebix.com website acts as an online auction house for auto, home, health, life and other types of insurance -- and Ebix gets a fee on each transaction. It's cutting-edge applications like this that make Ebix an industry leader.
And the numbers prove it.
Ebix reported its best-ever net income and revenue for the first quarter of 2009. EBIX reported earnings of $8.34 million or 69 cents per share, which is 47% higher than last year's earnings of 47 cents per share. Total revenue rose from $16.64 million to a 33-year high of $20.67 million during the quarter. The company's expenses grew by 17%, but I want to also point out that Ebix's operating margins grew to 40%.
Remember, operating margins growth shows that a company is demanding higher prices from its products while keeping sales down -- a great sign of efficiency and strong demand. This shows Ebix is becoming a dominant player in its industry since it's able to grow profit at a higher rate than its expenses.
Looking ahead, I expect Ebix will continue to play an important role on our Buy List, especially as the U.S. dollar weakens. The greenback was about 30% stronger during the first quarter of 2009 compared with the first quarter of 2008, and that took a bite out of Ebix's sales since this company does a lot of its business abroad. A weaker dollar going forward will help to prop up Ebix's revenues and income.
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