Genpact Limited (G - Free Report) reported better-than-expected fourth-quarter 2020 results.
Quarterly adjusted earnings per share of 51 cents outpaced the Zacks Consensus Estimate by 2% but declined 11% year over year. Revenues amounted to $951 million, which beat the consensus estimate by 1.8% and improved 1% year over year on a reported as well as constant-currency basis. The top line was aided by strength in Global Clients business.
Notably, Genpact’s shares have gained 5% over the past six months, significantly underperforming the 18.4% rally of the industry it belongs to.
Quarter Details
Global Clients (89% of total revenues) revenues climbed 4% year over year on a reported and 3% on a constant-currency basis to $841 million. This growth was driven by strong growth of Transformation Services. General Electric revenues of $109 million declined 16% year over year and contributed 11% to total revenues. The decline was mainly due to macroeconomic impact and planned productivity commitments. Adjusted income from operations totaled $148 million, down 7% year over year. Adjusted operating income margin of 15.5% declined 140 basis points (bps) year over year.
Genpact exited the quarter with cash and cash equivalents of $680 million compared with $803 million recorded at the end of the previous quarter. Long-term debt totaled $1.3 billion, flat with the prior quarter.
The company generated $159 million of cash from operating activities and capex was $22 million. Genpact returned $63 million to shareholders through share repurchases and $18 million through dividends in the quarter.
Raised 2020 Guidance
Genpact raised its 2020 guidance.The company now expects revenues to be between $3.93 and $3.99 billion, compared with the prior guidance of $3.68 to $3.695 billion. The current Zacks Consensus Estimate is pegged at $3.93 billion.
The company currently expects Global Clients revenue growth to be 8-10% compared with 6-6.5% projected earlier. Adjusted operating income margin is anticipated to be around 16% compared with the prior anticipation of 15.7%.
Adjusted EPS is now anticipated in the range of $2.26 to 2.29 compared with $2.08 to $2.11 anticipated earlier. The midpoint of this raised guided range is same as the Zacks Consensus Estimate of $2.28.
Genpact currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year-over-year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Esimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
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Genpact Limited (G - Free Report) reported better-than-expected fourth-quarter 2020 results.
Quarterly adjusted earnings per share of 51 cents outpaced the Zacks Consensus Estimate by 2% but declined 11% year over year. Revenues amounted to $951 million, which beat the consensus estimate by 1.8% and improved 1% year over year on a reported as well as constant-currency basis. The top line was aided by strength in Global Clients business.
Notably, Genpact’s shares have gained 5% over the past six months, significantly underperforming the 18.4% rally of the industry it belongs to.
Quarter Details
Global Clients (89% of total revenues) revenues climbed 4% year over year on a reported and 3% on a constant-currency basis to $841 million. This growth was driven by strong growth of Transformation Services. General Electric revenues of $109 million declined 16% year over year and contributed 11% to total revenues. The decline was mainly due to macroeconomic impact and planned productivity commitments. Adjusted income from operations totaled $148 million, down 7% year over year. Adjusted operating income margin of 15.5% declined 140 basis points (bps) year over year.
Genpact exited the quarter with cash and cash equivalents of $680 million compared with $803 million recorded at the end of the previous quarter. Long-term debt totaled $1.3 billion, flat with the prior quarter.
The company generated $159 million of cash from operating activities and capex was $22 million. Genpact returned $63 million to shareholders through share repurchases and $18 million through dividends in the quarter.
Raised 2020 Guidance
Genpact raised its 2020 guidance.The company now expects revenues to be between $3.93 and $3.99 billion, compared with the prior guidance of $3.68 to $3.695 billion. The current Zacks Consensus Estimate is pegged at $3.93 billion.
The company currently expects Global Clients revenue growth to be 8-10% compared with 6-6.5% projected earlier. Adjusted operating income margin is anticipated to be around 16% compared with the prior anticipation of 15.7%.
Adjusted EPS is now anticipated in the range of $2.26 to 2.29 compared with $2.08 to $2.11 anticipated earlier. The midpoint of this raised guided range is same as the Zacks Consensus Estimate of $2.28.
Genpact currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year-over-year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Esimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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