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IQVIA (IQV) Beats Q2 Earnings Estimates, Raises 2018 View

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IQVIA Holdings Inc. (IQV - Free Report) reported strong second-quarter 2018 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of $1.29 per share exceeded the Zacks Consensus Estimate by 5 cents and increased 25.2% year over year. Total revenues came it at $2.57 billion, which outpaced the consensus mark by $63 million. The top line grew 9% on a reported basis and 7.7% on a constant-currency basis.

The better-than-expected results were driven by positive impacts of the strategic investments that IQVIA has been making in innovation across its businesses over past 18 months. The company secured major wins for its tech offerings and recorded highest ever R&D bookings in the reported quarter.

In a year’s time, shares of IQVIA have gained 32.6%, outperforming the 2.9% increase of the industry it belongs to.

Let’s check out the numbers in detail

Segmental Revenues

Revenues from Technology & Analytics Solutions (formerly Commercial Solutions) totaled $1.01 billion, up 14.2% on a reported basis and 13.1% on a constant-currency basis.

Research & Development Solutions revenues of $1.35 billion increased 9.6% on a reported basis and 8.3% on a constant-currency basis.

Contract Sales & Medical Solutions (formerly Integrated Engagement Services) revenues of $206 million decreased 13.4% on a reported basis and 15.1% on a constant-currency basis.

IQVIA Holdings Inc. Revenue (TTM)

Operating Performance

Adjusted EBITDA was $533 million, up 14.1% on a reported basis and 14.3% on a constant-currency basis.

Operating income summed $170 million, up 34.9% from the year-ago quarter. Operating income margin expanded to 6.6% from 5.4% in the year-ago quarter.

Total selling, general and administrative expenses of $424 million were up 12.2% from the year-ago quarter.

Balance Sheet and Cash Flow

IQVIA Holdings exited second-quarter with cash and cash equivalents balance $879 million compared with $960 million at the end of the prior quarter. Long-term debt at the end of the quarter was $10.6 billion compared with $10.3 billion at the end of the first quarter. The company generated $311 million of cash from operating activities in the reported quarter.

IQVIA repurchased shares worth $573 million during the reported quarter. As of Jun 30, 2018, the company had $1 billion available under its share repurchase authorization.

Third-Quarter Guidance

For the third quarter, total revenues are expected in the range of $2.55-$2.60 billion. Adjusted EBITDA is projected to be in the range of $540-$560 million. Adjusted earnings per share are anticipated in the $1.35-$1.42 band.

2018 Outlook

IQVIA raised its full-year guidance for revenues, adjusted EBITDA and adjusted EPS.Revenues are expected in the range of $10.25 billion to $10.40 billion, compared with the previous expectation of $10.05 billion to $10.25 billion. Adjusted EBITDA is expected in the range of $2.17-$2.23 billion compared with the previous expectation of $2.15-$2.22 billion. Adjusted EPS is envisioned in the range of $5.35-$5.55 billion compared with $5.20-$5.45 billion guided earlier.

Zacks Rank & Upcoming Releases

IQVIA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Business Services sector are keenly awaiting second-quarter earnings reports from key players like Republic Services (RSG - Free Report) , S&P Global (SPGI - Free Report) and FTI Consulting (FCN - Free Report) .  All the companies are slated to report their quarterly numbers on Jul 26.

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