Mid Cap Watch List (Track at Marketocracy) and Large Cap Watch List (Track at Marketocracy) member IMS Health (RX) Delivered 14 Percent Revenue and 15 Percent Operating Income Growth in First Quarter:

IMS Health (NYSE: RX - News), the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries, today announced first-quarter 2007 revenue of $510.3 million, up 14 percent or 11 percent on a constant- dollar basis, compared with revenue of $446.2 million for the first quarter of 2006.

First-quarter 2007 diluted earnings per share on a GAAP basis was $0.43, compared with $0.56 in the prior-year quarter. Earnings per share for the first quarter of 2007 and 2006 included tax benefits and foreign exchange hedge gains and losses. When adjusted for these items, on a non-GAAP basis, earnings per share for this year’s first quarter would have grown $0.04 year over year to $0.35.

Consensus estimates called for $0.34 on $491 million in sales, both of which were nicely exceeded. However, the guidance issued on the conference call did not follow suit:

Constant dollar revenue growth of 9% to 11%, constant dollar operating income growth of 9% to 11%, full year GAAP EPS of $1.56 to $1.60, and free cash flow of $290 million to $325 million. With this strong Q1 performance, we continue to be comfortable with our full year guidance.

Confirming rather than raising guidance of 9% to 11% revenue growth when the first quarter had 14% (and beat estimates by nearly 4%) indicates things may slow down later in the year. And with consensus at $1.59 (the high end of EPS guidance) investors were probably hoping for an indication that the penny surprise would be followed by similar ones later in the year.

With the end of the first quarter approaching, it is time to adjust the names in our Watch Lists. We will price all the new lists as of the close on Friday, March 30. Today we present our planned updates to the Large Cap Watch List (Track at Marketocracy).

Though less than the Small Cap Watch List and Mid Cap Watch List (Track at Marketocracy), there was still relatively high turnover in this list. 14 of the original 33 names made the cut for the new list (which was trimmed to just 26 names.) Part of the reason for the turnover was to reduce overlap between the lists. One third of the Mid Cap Watch List (Track at Marketocracy) names appear on each of the Small Cap and Large Cap Watch List (Track at Marketocracy)s, but there is no longer any overlap between small and large.
So without further ado, the names on the chopping block from the previous list are:

3M (MMM); Continental (CTTAY.PK); Mitsui (MITSY); Anheuser-Busch (BUD); ConocoPhillips (COP); Helix Energy (HELX); IndyMac Bancorp (NDE - Annual Report); Barr Pharmaceutical (BRL - Annual Report); Quest Diagnostics (DGX); Public Storage (PSA); ITT Educational Services (ESI); Equifax (EFX); Rent-a-Center (RCII); Kroger (KR); Ricoh (RICOY); First Data Corp. (FDC); Expeditors International (EXPD); and Keyspan (KSE).

The new list is: