CoStar Group Inc. completed its acquisition of STR Inc., which provides performance benchmark information to hotel brands, and unit STR Global Ltd. for approximately $450 million.
The commercial real estate information provider expects STR to add $3 million to $4 million in revenue in the fourth quarter. Due to integration costs and purchase accounting adjustments for deferred revenue, CoStar expects STR adjusted EBITDA of negative $5 million to $6 million in the quarter.
The company increased its outlook for revenue but cut its forecasts for non-GAAP EPS and adjusted EBITDA for full year 2019. CoStar expects revenues of about $1.39 billion, an increase of $2 million at the midpoint of the range compared with the previous outlook. The company also anticipates non-GAAP EPS of $9.90 to $10.02, a decrease of 11 cents at the midpoint compared with the previous forecast, and adjusted EBITDA of $494 million to $500 million, a decrease of $5 million at the midpoint of the range.
The S&P Global Market Intelligence consensus normalized EPS estimate for the year is $9.99.
For the fourth quarter, CoStar expects revenue of $360 million to $366 million, adjusted EBITDA of $129 million to $135 million and non-GAAP EPS of $2.52 to $2.64. CoStar's revenue forecast represents a 15% increase from the year-ago period at the midpoint of the range.
The S&P Global Market Intelligence consensus normalized EPS estimate for the quarter is $2.62.
CoStar reported third-quarter non-GAAP net income of $95.8 million, or $2.61 per share, up from $78.8 million, or $2.16 per share, in the year-ago period. GAAP net income also increased year over year to $78.6 million, or $2.15 per share, from $58.8 million, or $1.61 per share.
The Market Intelligence consensus normalized EPS for the third quarter was $2.52.