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Navigant (NCI) Stock Down Despite Q4 Earnings, Revenue Beat
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Navigant Consulting Inc. reported adjusted earnings per share (EPS) of 30 cents in fourth-quarter 2016 compared with 28 cents in the prior-year quarter. Adjusted earnings comfortably beat the Zacks Consensus Estimate of 26 cents. However, shares dipped 2.6% to close at $23.70 as of Feb 16, following the earnings release.
Navigant Consulting, Inc. Price, Consensus and EPS Surprise
Total revenue for the quarter was $266.1 million compared with $232.6 million in the prior-year period. Revenues before reimbursements (RBR) increased 13% year over year to approximately $239.7 million, beating the Zacks Consensus Estimate of $235.7 million. Revenues increased due to strong demand in Financial Services Advisory, Compliance, Healthcare and Energy Segments.
Adjusted EBITDA was $34.8 million, up 13% from $30.9 million in the prior-year quarter.
For full-year 2016, the company reported adjusted earnings of $62 million or $1.27 per share compared with $52.6 million or $1.07 per share in the prior year. Revenues for the year were $1,034.5 million compared with $919.4 million a year ago. Adjusted EBITDA was $142.3 million, up 17.7% from $120.9 million in the prior year.
Segmental Performance
RBR for the Healthcare segment, which turned out to be one of the strongest performers this quarter, increased 20.5% year over year to $91.7 million. The improvement was driven by strong demand for large, strategy-led transformation projects.
The Energy segment’s RBR saw growth of 13.8% year over year to $31.3 million in the reported quarter. The growth was primarily driven by contributions from the Ecofys acquisition. The segment’s operating profit margin was 29.3%, flat compared with the year-ago quarter.
The Disputes, Forensics & Legal Technology (earlier known as Disputes, Investigations & Economics) segment’s RBR increased 2.1% year over year to $78.4 million. The rise was primarily driven by the continued strong demand for its global expertise in complex industrial, infrastructure and commercial project matters and an increase in performance-based fees associated with mass tort claims work, partially offset by currency fluctuations. Segmental operating margin increased to 31.8% from 31.3%.
The Financial, Risk & Compliance Advisory segment’s RBR increased 21% year over year to $38.3 million in the quarter. Operating profit margin for the segment decreased to 38.6% from 39.5% in the year-earlier quarter due to higher RBR.
Balance Sheet and Cash Flow
As of Dec 31, 2016, Navigant had cash and cash equivalents of about $8.3 million compared with $8.9 million a year ago.
Bank debt was $135 million as of Dec 31, 2016, compared with $173.7 million as of Dec 31, 2015. Leverage (bank debt divided by trailing twelve-month adjusted EBITDA) was 0.95x at Dec 31, 2016, compared with 1.44x as of Dec 31, 2015.
For the year, net cash provided by operating activities was $110 million, compared with $83.1 million a year-ago, due to improved earnings. Free cash flow increased to $78.8 million for the year compared with $49 million in 2015, reflecting improved operating performance, decreased capital expenditures and a decline in deferred acquisition payments. Navigant repurchased 291,495 shares during the fourth quarter at an aggregate cost of $6.3 million and an average cost of $21.46 per share. For full-year 2016, the company repurchased approximately 1.4 million shares at an aggregate cost of $25.1 million and an average cost of $17.45 per share. As of Dec 31, 2016, approximately $63.0 million remained available under its share repurchase authorization.
Outlook Up
Navigant offered its guidance for full-year 2017. RBR is expected to range between $975 million to $1 billion while total revenue is expected to be around $1.1 billion. Adjusted EBITDA for the full year is expected to be in the range of $145−$156 million and adjusted EPS is estimated to be between $1.29 and $1.36.
Navigant currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include NV5 Global, Inc.(NVEE - Free Report) , Exponent Inc. (EXPO - Free Report) and CRA International, Inc. (CRAI - Free Report) . NV5 Global and Exponent both hold a Zacks Rank #2 (Buy), whereas CRA International sports a Zacks Rank #1 (Strong Buy) . You can see the complete list of today’s Zacks #1 Rank stocks here.
NV5 Global has a long-term earnings growth expectation of 20% and is currently trading at a forward P/E of 19.88x.
CRA International has a long-term earnings growth expectation of 8% and is currently trading at a forward P/E of 24.73x.
Exponent has a long-term earnings growth expectation of 12% and is currently trading at a forward P/E of 32.93x.
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Navigant (NCI) Stock Down Despite Q4 Earnings, Revenue Beat
Navigant Consulting Inc. reported adjusted earnings per share (EPS) of 30 cents in fourth-quarter 2016 compared with 28 cents in the prior-year quarter. Adjusted earnings comfortably beat the Zacks Consensus Estimate of 26 cents. However, shares dipped 2.6% to close at $23.70 as of Feb 16, following the earnings release.
Navigant Consulting, Inc. Price, Consensus and EPS Surprise
Navigant Consulting, Inc. Price, Consensus and EPS Surprise | Navigant Consulting, Inc. Quote
Total revenue for the quarter was $266.1 million compared with $232.6 million in the prior-year period. Revenues before reimbursements (RBR) increased 13% year over year to approximately $239.7 million, beating the Zacks Consensus Estimate of $235.7 million. Revenues increased due to strong demand in Financial Services Advisory, Compliance, Healthcare and Energy Segments.
Adjusted EBITDA was $34.8 million, up 13% from $30.9 million in the prior-year quarter.
For full-year 2016, the company reported adjusted earnings of $62 million or $1.27 per share compared with $52.6 million or $1.07 per share in the prior year. Revenues for the year were $1,034.5 million compared with $919.4 million a year ago. Adjusted EBITDA was $142.3 million, up 17.7% from $120.9 million in the prior year.
Segmental Performance
RBR for the Healthcare segment, which turned out to be one of the strongest performers this quarter, increased 20.5% year over year to $91.7 million. The improvement was driven by strong demand for large, strategy-led transformation projects.
The Energy segment’s RBR saw growth of 13.8% year over year to $31.3 million in the reported quarter. The growth was primarily driven by contributions from the Ecofys acquisition. The segment’s operating profit margin was 29.3%, flat compared with the year-ago quarter.
The Disputes, Forensics & Legal Technology (earlier known as Disputes, Investigations & Economics) segment’s RBR increased 2.1% year over year to $78.4 million. The rise was primarily driven by the continued strong demand for its global expertise in complex industrial, infrastructure and commercial project matters and an increase in performance-based fees associated with mass tort claims work, partially offset by currency fluctuations. Segmental operating margin increased to 31.8% from 31.3%.
The Financial, Risk & Compliance Advisory segment’s RBR increased 21% year over year to $38.3 million in the quarter. Operating profit margin for the segment decreased to 38.6% from 39.5% in the year-earlier quarter due to higher RBR.
Balance Sheet and Cash Flow
As of Dec 31, 2016, Navigant had cash and cash equivalents of about $8.3 million compared with $8.9 million a year ago.
Bank debt was $135 million as of Dec 31, 2016, compared with $173.7 million as of Dec 31, 2015. Leverage (bank debt divided by trailing twelve-month adjusted EBITDA) was 0.95x at Dec 31, 2016, compared with 1.44x as of Dec 31, 2015.
For the year, net cash provided by operating activities was $110 million, compared with $83.1 million a year-ago, due to improved earnings. Free cash flow increased to $78.8 million for the year compared with $49 million in 2015, reflecting improved operating performance, decreased capital expenditures and a decline in deferred acquisition payments. Navigant repurchased 291,495 shares during the fourth quarter at an aggregate cost of $6.3 million and an average cost of $21.46 per share. For full-year 2016, the company repurchased approximately 1.4 million shares at an aggregate cost of $25.1 million and an average cost of $17.45 per share. As of Dec 31, 2016, approximately $63.0 million remained available under its share repurchase authorization.
Outlook Up
Navigant offered its guidance for full-year 2017. RBR is expected to range between $975 million to $1 billion while total revenue is expected to be around $1.1 billion. Adjusted EBITDA for the full year is expected to be in the range of $145−$156 million and adjusted EPS is estimated to be between $1.29 and $1.36.
Navigant currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include NV5 Global, Inc.(NVEE - Free Report) , Exponent Inc. (EXPO - Free Report) and CRA International, Inc. (CRAI - Free Report) . NV5 Global and Exponent both hold a Zacks Rank #2 (Buy), whereas CRA International sports a Zacks Rank #1 (Strong Buy) . You can see the complete list of today’s Zacks #1 Rank stocks here.
NV5 Global has a long-term earnings growth expectation of 20% and is currently trading at a forward P/E of 19.88x.
CRA International has a long-term earnings growth expectation of 8% and is currently trading at a forward P/E of 24.73x.
Exponent has a long-term earnings growth expectation of 12% and is currently trading at a forward P/E of 32.93x.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>