Broadridge Financial Solutions, Inc. (BR - Free Report) reported dismal second-quarter fiscal 2020 results that missed the Zacks Consensus Estimate on both earnings and revenues.
Adjusted earnings of 53 cents per share missed the consensus estimate by 30% and were down 5% year over year. Total revenues of $969 million lagged the consensus mark by 3% but were up 2% year over year. The company generated closed sales of $45 million in the quarter, down 57% year over year.
Shares of the company have gained 28.4% over the past year, outperforming the 22.7% rally of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues in the Investor Communication Solutions segment declined 2% from the year-ago quarter’s level to $716 million. Global Technology and Operations segment revenues came in at $281 million, up 14% from the year-ago quarter’s figure. The improvement was driven by acquisitions and organic growth. Recurring fee revenues of $648 million increased 7% from the year-ago quarter’s level.
Operating Results
Adjusted operating income of $94 million declined 7% year over year. Adjusted operating income margin declined to 9.7% from 10.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Broadridge exited the second quarter with cash and cash equivalents of $234 million compared with $358.3 million at the end of the prior quarter. Long-term debt was $1.45 billion compared with $1.37 billion at the end of the prior quarter.
The company generated $97.9 million of cash in operating activities and capex was $17.5 million in the quarter. Broadridge paid out $61.8 million in dividends in the reported quarter.
Guidance
Broadridge reiterated fiscal year 2020 guidance expecting adjusted EPS at the low end of the range.
Total revenues are expected to grow 3-6%. Recurring fee revenue growth is anticipated in the range of 8-10%. Adjusted operating income margin is estimated to be approximately 18%. Closed sales are anticipated to be between $190 million and $230 million. Adjusted EPS growth is expected to be toward the lower end of the 8-12% range.
Zacks Rank & Upcoming Releases
Broadridge currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Business Services sector are Waste Management (WM - Free Report) , S&P Global (SPGI - Free Report) and Fidelity National Information Services (FIS - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings (three to five years) growth rate for Waste Management, S&P Global and Fidelity National Information Services is estimated at 8.2%, 10% and 8.9%, respectively.
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Broadridge Financial Solutions, Inc. (BR - Free Report) reported dismal second-quarter fiscal 2020 results that missed the Zacks Consensus Estimate on both earnings and revenues.
Adjusted earnings of 53 cents per share missed the consensus estimate by 30% and were down 5% year over year. Total revenues of $969 million lagged the consensus mark by 3% but were up 2% year over year. The company generated closed sales of $45 million in the quarter, down 57% year over year.
Shares of the company have gained 28.4% over the past year, outperforming the 22.7% rally of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues in the Investor Communication Solutions segment declined 2% from the year-ago quarter’s level to $716 million. Global Technology and Operations segment revenues came in at $281 million, up 14% from the year-ago quarter’s figure. The improvement was driven by acquisitions and organic growth. Recurring fee revenues of $648 million increased 7% from the year-ago quarter’s level.
Operating Results
Adjusted operating income of $94 million declined 7% year over year. Adjusted operating income margin declined to 9.7% from 10.6% in the prior-year quarter.
Balance Sheet and Cash Flow
Broadridge exited the second quarter with cash and cash equivalents of $234 million compared with $358.3 million at the end of the prior quarter. Long-term debt was $1.45 billion compared with $1.37 billion at the end of the prior quarter.
The company generated $97.9 million of cash in operating activities and capex was $17.5 million in the quarter. Broadridge paid out $61.8 million in dividends in the reported quarter.
Guidance
Broadridge reiterated fiscal year 2020 guidance expecting adjusted EPS at the low end of the range.
Total revenues are expected to grow 3-6%. Recurring fee revenue growth is anticipated in the range of 8-10%. Adjusted operating income margin is estimated to be approximately 18%. Closed sales are anticipated to be between $190 million and $230 million. Adjusted EPS growth is expected to be toward the lower end of the 8-12% range.
Zacks Rank & Upcoming Releases
Broadridge currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Business Services sector are Waste Management (WM - Free Report) , S&P Global (SPGI - Free Report) and Fidelity National Information Services (FIS - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings (three to five years) growth rate for Waste Management, S&P Global and Fidelity National Information Services is estimated at 8.2%, 10% and 8.9%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
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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