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IQVIA (IQV) Beats on Q2 Earnings, Revenues, Ups 2020 View

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IQVIA Holdings Inc. (IQV - Free Report) reported solid second-quarter 2020 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of $1.18 beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Total revenues of $2.52 billion outpaced the consensus estimate by 4.8% but decreased 8% year over year on a reported basis and 7.1% on a constant-currency basis. The reported figure came above the guided range of $2.37-$2.44 billion.

So far this year, shares of IQVIA Holdings have gained 1.6% compared with 28.5% growth of the industry  it belongs to and 1.3% rise of the Zacks S&P 500 composite.

 

Let’s check out the numbers in detail:

Segmental Revenues

Revenues from Technology & Analytics Solutions totaled $1.11 billion, up 0.6% on a reported basis and 2% on a constant-currency basis. The segment accounted for 44% of total revenues.

Research & Development Solutions’ revenues of $1.24 billion decreased 13.9% on a reported basis and 13.3% on a constant-currency basis. The segment contributed 49% to total revenues.

Revenues from Contract Sales & Medical Solutions totaled $177 million, down 12.8% on a reported and 12.3% on a constant-currency basis. The segment accounted for 7% of total revenues.

Operating Performance

Adjusted EBITDA was $483 million, down 16.4% year over year. Adjusted EBITDA margin decreased to 19.2% from 21.1% in the year-ago quarter.

Operating income was $62 million, down 68.5% from the year-ago quarter. Operating income margin decreased to 2.5% from 7.2% in the year-ago quarter.

IQVIA Holdings Inc. Price, Consensus and EPS Surprise

 

IQVIA Holdings Inc. Price, Consensus and EPS Surprise

IQVIA Holdings Inc. price-consensus-eps-surprise-chart | IQVIA Holdings Inc. Quote

Balance Sheet and Cash Flow

IQVIA exited second-quarter 2020 with cash and cash equivalents balance of $1.11 billion compared with $927 million at the end of the prior quarter. Long-term debt of $11.9 billion was flat sequentially.

The company generated $472 million of cash from operating activities in the reported quarter and CapEx was $142 million.

Share Repurchase

Withthe coronavirus outbreak turning into a pandemic in March, IQVIA temporarily suspended its share repurchases. The company did not repurchase any share during the second quarter of 2020. As of Jun 30, 2020, the company had nearly $1 billion of share repurchase authorization remaining.

Third-Quarter 2020 Guidance

IQVIA expects third quarter revenues between $2.73-$2.78 billion. The current Zacks Consensus Estimate of $2.58 billion lies below the guidance.

Adjusted earnings per share are expected to be between $1.47 and $1.55. The current Zacks Consensus Estimate of $1.40 lies below the guidance.

Adjusted EBITDA is anticipated between $564 million and $582 million.

2020 Guidance

IQVIA raised its full-year guidance. The company now projects adjusted earnings between $6.10 and $6.30 compared with the prior guidance of $5.75 and $6.10 per share. The current Zacks Consensus Estimate of $5.82 lies below the updated guidance.

Revenues are now expected between $11-$11.1 billion compared with the prior guidance of $10.6 billion and $10.9 billion. The current Zacks Consensus Estimate of $10.67 billion lies below the updated guidance.

Adjusted EBITDA is now anticipated between $2,295 million and $2,345 million compared with the prior guided range of $2,200 - $2,300 million.

Currently, IQVIA carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Zacks Business Services sector are awaiting second-quarter 2020 earnings of key players like S&P Global (SPGI - Free Report) , Avis Budget Group (CAR - Free Report) and Waste Management (WM - Free Report) . While S&P Global and Avis Budget Group are slated to release their results on Jul 28, Waste Management is scheduled to release the same on Jul 30.

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