ICF International, Inc. (ICFI - Free Report) reported impressive first-quarter 2020 numbers, with both earnings and revenues beating the Zacks Consensus Estimate.
Non-GAAP EPS of 83 cents surpassed the consensus mark by 9.2% but declined 4.6% on a year-over-year basis. Revenues of $358.2 million marginally beat the consensus mark and increased 5% year over year.
Despite the better-than-expected results, the stock declined 11.9% from the day of reporting (May 5), as the EPS guidance for 2020 was dismal. The company lowered the range from the $4- $4.3 guided earlier to $3.5-3.8. Further, the mid-point ($3.65) of the revised range is below the current Zacks Consensus Estimate of $3.74.
Over the past year, ICF’s shares have depreciated 15.7%, as against 10.5% growth of the industry it belongs to.
The company stated that the coronavirus pandemic did not have a significant impact on its quarterly performance. Notably, it has business-continuity plans in place and shifted more than 98% of its employees to work from home.
Revenues in Detail
Revenues from government clients came in at $239.8 million and improved 6.5% year over year. The U.S. federal government revenues of $155.4 million increased 17.6% year over year and contributed 44% to total revenues. The U.S. state and local government revenues of $61.3 million decreased 7% year over year and contributed 17% to total revenues. International government revenues of $23.1 million were down 14.8% year over year, contributing 6% to total revenues.
Commercial revenues totaled $118.4 million, up 2% from the year-ago quarter’s figure and contributed 33% to total revenues. Energy markets and marketing services contributed 47% and 43%, respectively, to commercial revenues.
Backlog and Value of Contracts
Total backlog and funded backlog amounted to $2.7 billion and $1.3 billion at the end of the first quarter, respectively. The total value of contracts awarded in the quarter came in at $356.9 million, up 23.4%.
Operational Results
Adjusted EBITDA was $28 million, down 1.8% from the year-ago quarter’s figure. Adjusted EBITDA margin of 7.8% shrunk 50 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 8.3%, down 90 bps year over year.
Balance Sheet
ICF exited the March-end quarter with cash and cash equivalent balance of $58.7 million compared with the $6.5 million recorded at the end of the previous quarter. The company had a long-term debt of $507 million compared with the $164.3 million witnessed at the end of the prior quarter.
The company used $15.2 million of cash from operating activities, and capex was $4.7 million. ICF paid out dividends of $2.6 million in the reported quarter.
2020 Guidance
Management lowered its revenue expectation to $1.45-$1.51 billion from the $1.6-$1.65 billion anticipated previously. The current Zacks Consensus Estimate of $1.47 billion lies below the mid-point ($1.48) of the revised guidance.
EBITDA is expected to be $126-$136 million compared with the prior estimate of $145-$155 million. Operating cash flow is anticipated to be around $110 million compared with the previous expectation of $120 million.
ICF 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
S&P Global Inc. (SPGI - Free Report) reported first-quarter 2020 adjusted earnings per share of $2.73, which beat the consensus mark by 15.7% and improved 29.4% year over year on revenue growth, benefits of productivity initiatives and reduced business travel. The stock carries a Zacks Rank #3 currently.
IQVIA Holdings Inc. (IQV - Free Report) delivered first-quarter 2020 adjusted earnings per share of $1.50, which outpaced the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure was within the guided range of $1.46-$1.51. The stock currently carries a Zacks Rank of 3.
Insperity, Inc. (NSP - Free Report) came up with first-quarter 2020 adjusted earnings of $1.70 per share, which surpassed the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher-end of the guided range of $1.61-$1.70. The stock currently carries a Zacks Rank #3.
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ICF International, Inc. (ICFI - Free Report) reported impressive first-quarter 2020 numbers, with both earnings and revenues beating the Zacks Consensus Estimate.
Non-GAAP EPS of 83 cents surpassed the consensus mark by 9.2% but declined 4.6% on a year-over-year basis. Revenues of $358.2 million marginally beat the consensus mark and increased 5% year over year.
Despite the better-than-expected results, the stock declined 11.9% from the day of reporting (May 5), as the EPS guidance for 2020 was dismal. The company lowered the range from the $4- $4.3 guided earlier to $3.5-3.8. Further, the mid-point ($3.65) of the revised range is below the current Zacks Consensus Estimate of $3.74.
Over the past year, ICF’s shares have depreciated 15.7%, as against 10.5% growth of the industry it belongs to.
The company stated that the coronavirus pandemic did not have a significant impact on its quarterly performance. Notably, it has business-continuity plans in place and shifted more than 98% of its employees to work from home.
Revenues in Detail
Revenues from government clients came in at $239.8 million and improved 6.5% year over year. The U.S. federal government revenues of $155.4 million increased 17.6% year over year and contributed 44% to total revenues. The U.S. state and local government revenues of $61.3 million decreased 7% year over year and contributed 17% to total revenues. International government revenues of $23.1 million were down 14.8% year over year, contributing 6% to total revenues.
Commercial revenues totaled $118.4 million, up 2% from the year-ago quarter’s figure and contributed 33% to total revenues. Energy markets and marketing services contributed 47% and 43%, respectively, to commercial revenues.
Backlog and Value of Contracts
Total backlog and funded backlog amounted to $2.7 billion and $1.3 billion at the end of the first quarter, respectively. The total value of contracts awarded in the quarter came in at $356.9 million, up 23.4%.
Operational Results
Adjusted EBITDA was $28 million, down 1.8% from the year-ago quarter’s figure. Adjusted EBITDA margin of 7.8% shrunk 50 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 8.3%, down 90 bps year over year.
Balance Sheet
ICF exited the March-end quarter with cash and cash equivalent balance of $58.7 million compared with the $6.5 million recorded at the end of the previous quarter. The company had a long-term debt of $507 million compared with the $164.3 million witnessed at the end of the prior quarter.
The company used $15.2 million of cash from operating activities, and capex was $4.7 million. ICF paid out dividends of $2.6 million in the reported quarter.
2020 Guidance
Management lowered its revenue expectation to $1.45-$1.51 billion from the $1.6-$1.65 billion anticipated previously. The current Zacks Consensus Estimate of $1.47 billion lies below the mid-point ($1.48) of the revised guidance.
EBITDA is expected to be $126-$136 million compared with the prior estimate of $145-$155 million. Operating cash flow is anticipated to be around $110 million compared with the previous expectation of $120 million.
ICF 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
S&P Global Inc. (SPGI - Free Report) reported first-quarter 2020 adjusted earnings per share of $2.73, which beat the consensus mark by 15.7% and improved 29.4% year over year on revenue growth, benefits of productivity initiatives and reduced business travel. The stock carries a Zacks Rank #3 currently.
IQVIA Holdings Inc. (IQV - Free Report) delivered first-quarter 2020 adjusted earnings per share of $1.50, which outpaced the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure was within the guided range of $1.46-$1.51. The stock currently carries a Zacks Rank of 3.
Insperity, Inc. (NSP - Free Report) came up with first-quarter 2020 adjusted earnings of $1.70 per share, which surpassed the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher-end of the guided range of $1.61-$1.70. The stock currently carries a Zacks Rank #3.
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 +24.1% 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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