Genpact Limited (G - Free Report) delivered impressive first-quarter 2019 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of 43 cents outpaced the consensus mark by 2 cents and increased 10% year over year. The bottom line was driven by a positive impact of 10 cents from higher operating profits, partially offset by a foreign exchange balance sheet remeasurement loss of a penny, tax impact of 2 cents, and higher net interest expense of a penny.
Revenues amounted to $809 million, which beat the consensus estimate by $46 million and improved 17% year over year on a reported basis and 19% on a constant-currency (cc) basis. The top line was driven by strong growth in the company’s High Tech, consumer goods and retail and industrial manufacturing verticals.
The company’s shares have gained 33.6% year to date, significantly outperforming the 23.2% rally of the industry it belongs to.
Let’s check the numbers in detail.
Revenues in Detail
Total BPO revenues (84% of total revenues) increased 19% year over year to $681 million. Total IT revenues (16% of total revenues) came in at $128 million, up 11% year over year.
Global Clients (87% of total revenue) revenues climbed 11% year over year on a reported basis and 12% at cc to $700 million. Global Client BPO revenues of $605 million improved 12% year over year on a reported basis and 14% at cc. Global Client IT revenues grew 5% year over year to $95 million.
General Electric (GE) revenues of $109 million increased 88% year over year. It contributed 13% total revenues. GE BPO revenues improved 126% year over year to $76 million. GE IT revenues of $33 million increased 35% from the year-ago quarter’s number.
Genpact Limited Revenue (TTM)
Operating Results
Adjusted income from operations totaled $122 million, up 25% year over year. Adjusted operating income margin increased to 15% from 14.1% in the year-ago quarter.
Selling, general & administrative (SG&A) expenses amounted to $191.4 million, up 11.9% year over year. As a percentage of revenues, SG&A expenses were 23.7% compared with 24.8% in the prior-year quarter.
Balance Sheet and Cash Flow
Genpact exited the first quarter with cash and cash equivalents of $325.4 million compared with $368.4 million at the end of the previous quarter. Long-term debt (less current portion) totaled $966.9 million compared with $975.6 million at the end of fourth-quarter 2018.
The company used $5.4 million of cash in operating activities in the quarter. Capital expenditures were $14.1 million.
Genpact returned almost $16 million to shareholders through dividend payment in the quarter.
Guidance
Genpact reiterated its 2019 guidance. It continues to expect revenues in the range of $3.33-$3.39 billion, which indicates year-over-year growth of almost 11-13% on a reported basis and 12-14% at cc. The Zacks Consensus Estimate is pegged at $3.38 billion.
Global Client revenues are expected to register 9.0-10.5% growth on a reported basis and 10.0-11.5% rise at cc. Adjusted operating income margin is anticipated to be around 16%.
Adjusted earnings are projected between $1.96 and $2.00. The Zacks Consensus Estimate is pegged at $1.99.
Zacks Rank & Upcoming Releases
Genpact currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are WEX (WEX - Free Report) , Automatic Data Processing (ADP - Free Report) and FLEETCOR . While WEX sports a Zacks Rank #1, Automatic Data Processing and FLEETCOR carry a Zacks Rank #2 (Buy).
Long-term expected EPS (three to five years) growth rate for WEX, Automatic Data Processing and FLEETCOR is 15%, 13% and 16.5%, respectively.
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Genpact Limited (G - Free Report) delivered impressive first-quarter 2019 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of 43 cents outpaced the consensus mark by 2 cents and increased 10% year over year. The bottom line was driven by a positive impact of 10 cents from higher operating profits, partially offset by a foreign exchange balance sheet remeasurement loss of a penny, tax impact of 2 cents, and higher net interest expense of a penny.
Revenues amounted to $809 million, which beat the consensus estimate by $46 million and improved 17% year over year on a reported basis and 19% on a constant-currency (cc) basis. The top line was driven by strong growth in the company’s High Tech, consumer goods and retail and industrial manufacturing verticals.
The company’s shares have gained 33.6% year to date, significantly outperforming the 23.2% rally of the industry it belongs to.
Let’s check the numbers in detail.
Revenues in Detail
Total BPO revenues (84% of total revenues) increased 19% year over year to $681 million. Total IT revenues (16% of total revenues) came in at $128 million, up 11% year over year.
Global Clients (87% of total revenue) revenues climbed 11% year over year on a reported basis and 12% at cc to $700 million. Global Client BPO revenues of $605 million improved 12% year over year on a reported basis and 14% at cc. Global Client IT revenues grew 5% year over year to $95 million.
General Electric (GE) revenues of $109 million increased 88% year over year. It contributed 13% total revenues. GE BPO revenues improved 126% year over year to $76 million. GE IT revenues of $33 million increased 35% from the year-ago quarter’s number.
Genpact Limited Revenue (TTM)
Operating Results
Adjusted income from operations totaled $122 million, up 25% year over year. Adjusted operating income margin increased to 15% from 14.1% in the year-ago quarter.
Selling, general & administrative (SG&A) expenses amounted to $191.4 million, up 11.9% year over year. As a percentage of revenues, SG&A expenses were 23.7% compared with 24.8% in the prior-year quarter.
Balance Sheet and Cash Flow
Genpact exited the first quarter with cash and cash equivalents of $325.4 million compared with $368.4 million at the end of the previous quarter. Long-term debt (less current portion) totaled $966.9 million compared with $975.6 million at the end of fourth-quarter 2018.
The company used $5.4 million of cash in operating activities in the quarter. Capital expenditures were $14.1 million.
Genpact returned almost $16 million to shareholders through dividend payment in the quarter.
Guidance
Genpact reiterated its 2019 guidance. It continues to expect revenues in the range of $3.33-$3.39 billion, which indicates year-over-year growth of almost 11-13% on a reported basis and 12-14% at cc. The Zacks Consensus Estimate is pegged at $3.38 billion.
Global Client revenues are expected to register 9.0-10.5% growth on a reported basis and 10.0-11.5% rise at cc. Adjusted operating income margin is anticipated to be around 16%.
Adjusted earnings are projected between $1.96 and $2.00. The Zacks Consensus Estimate is pegged at $1.99.
Zacks Rank & Upcoming Releases
Genpact currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are WEX (WEX - Free Report) , Automatic Data Processing (ADP - Free Report) and FLEETCOR . While WEX sports a Zacks Rank #1, Automatic Data Processing and FLEETCOR carry a Zacks Rank #2 (Buy).
Long-term expected EPS (three to five years) growth rate for WEX, Automatic Data Processing and FLEETCOR is 15%, 13% and 16.5%, respectively.
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
Click here to see these breakthrough stocks 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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