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ICF International (ICFI) Q3 Earnings Beat, Increase Y/Y

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ICF International, Inc. (ICFI - Free Report) delivered better-than-expected third-quarter 2022 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.

The stock has lost 6.6% since the earnings release on Nov 3, as ICFI’s revenue guidance for 2022 was weak. Revenues are now projected in the range of $1.760-$1.790 billion (prior view: $1.760-$1.820 billion). The midpoint ($1.775 billion) of the guidance is lower than the current Zacks Consensus Estimate of 1.78 billion.  

Non-GAAP earnings of $1.61 per share surpassed the Zacks Consensus Estimate by 11.8% and rose 22% on a year-over-year basis. Moreover, revenues of $468 million beat the consensus mark by 0.5% and climbed 18.7% year over year owing to rising service revenues (up 21.7% year over year).

Revenues in Detail

Revenues from government clients came in at $359.9 million, up 25.6% on a year-over-year basis. The U.S. federal government revenues of $271.3 million increased 39% year over year and contributed 58% to total revenues.  

ICF International, Inc. Price, Consensus and EPS Surprise

ICF International, Inc. Price, Consensus and EPS Surprise

ICF International, Inc. price-consensus-eps-surprise-chart | ICF International, Inc. Quote

The U.S. state and local government revenues of $65.6 million moved up 11.6% year over year and contributed 14% to total revenues.

International government revenues of $23.1 million were down 29.4% year over year, contributing 4.9% to total revenues.  

Commercial revenues totaled $107.8 million, marginally up from the year-ago quarter’s figure and contributed 23.1% to total revenues. Energy markets and marketing services contributed 66.7% and 26.5%, respectively, to commercial revenues.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $3.7 billion and $1.8 billion at the end of the quarter, respectively. The total value of contracts awarded in the third quarter of 2022 came in at $865 million for a quarterly book-to-bill ratio of 1.31.

Operational Results

Adjusted EBITDA of $49.8 million rose 13.6% from the year-ago quarter’s figure. Adjusted EBITDA margin on revenues of 10.6% decreased 50 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 14.8%, down 110 bps year over year.

Balance Sheet

ICF exited the third quarter with a cash and cash equivalent balance of $8.5 million compared with $6.1 million recorded at the end of the previous quarter. ICFI had a long-term debt of $681.2 million compared with $435.1 million at the end of the prior quarter.

ICFI used $18.7 million cash from operating activities, while capex was $6.3 million. ICF paid out dividends of $2.63 million in the quarter.

Dividend

On Nov 3, 2022, ICF declared a quarterly cash dividend of 14 cents per share, payable Jan 12 to its stockholders of record as of Dec 9.

2022 Guidance

Service revenues are expected in the band of $1.275-$1.300 billion (prior view: $1.275-$1.325 billion).

Earnings are expected in the range of $5.70-$5.90 (prior view: $5.50-$5.80). The Zacks Consensus Estimate is pegged at $5.70, meeting the lower end of the band.

Adjusted EBITDA is still expected between $186 million and $198 million. Operating cash flow is expected in the range of $120-$140 million in 2022. ICF currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

Omnicom Group Inc. (OMC - Free Report) reported impressive third-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

Earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year, driven by a solid margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.

Equifax Inc. (EFX - Free Report) reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis.   

The Interpublic Group of Companies, Inc. (IPG - Free Report) reported better-than-expected third-quarter 2022 results.

Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been flat over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.

 

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