Why FactSet Research Systems Dropped

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What: Shares of FactSet Research Systems (NYS: FDS) have dropped by as much as 11% after the company reported acceptable earnings, but also revenue guidance for next quarter that falls short.

So what: Third-quarter sales rang in at $202.3 million, with adjusted earnings per share of $1.15, representing the first time that FactSet has crossed the $200 million quarterly revenue threshold. That revenue was right on target with expectations while the profit bested the $1.04-per-share consensus estimate.

Now what: CEO Philip Hadley said the economy remains volatile, but the company's strategy of investing in the future is paying off. Annual subscription value rose 9% to $811 million, most of which comes from buy-side clients. The real culprit for the plunge was fourth-quarter guidance, with sales predicted between $204 million and $208 million, which is a tad shy of the $210 million that investors were hoping for.

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At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio.Motley Fool newsletter serviceshave recommended buying shares of FactSet Research Systems. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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