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Genpact (G) Stock up 1.6% Since Q2 Earnings: Here's Why
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Shares of Genpact Limited (G - Free Report) have gained 1.6% since it reported its second-quarter 2020 results on Aug 7, outperforming the 1.4% growth of the industry it belongs to.
The outperformance can be attributed to the company’s impressive second-quarter 2020 results wherein both earnings and revenues beat the Zacks Consensus Estimate.
Adjusted earnings per share of 52 cents outpaced the consensus mark by 48.6% and increased 6% year over year. This upside was driven by higher operating income of 4 cents, partially offset by negative impact of a penny each from higher interest expense.
Revenues amounted to $900 million, which beat the consensus estimate by 7.4% and improved 2% year over year on a reported and 3% on a constant-currency basis. The top line was aided by strength across global client and GE businesses.
Quarter Details
Global Clients (87% of total revenues) revenues climbed 3% year over year on a reported basis and 4% on a constant-currency basis to $783 million. This growth was driven by enhanced revenue coverage associated with transition to remote-working model and stronger client demand for transformation services. General Electric revenues of $117 million declined 2% year over year and contributed 13% to total revenues.
Adjusted income from operations totaled $145 million, up 7% year over year. Adjusted operating income margin of 16.2% improved 80 basis points (bps) year over year.
Genpact exited the quarter with cash and cash equivalents of $867.4 million compared with the $401.6 million recorded at the end of the previous quarter. Long-term debt (less current portion) totaled $1.3 billion, more or less flat with the prior quarter.
The company generated $192 million of cash from operating activities and capex was $16.3 million. Genpact returned $19 million to shareholders through dividend payout in the quarter.
2020 Guidance
Genpact expects revenues to be between $3.63 and $3.67 billion, the midpoint ($3.65 billion) of which is less than the Zacks Consensus Estimate of $3.66 billion. Adjusted EPS is anticipated in the range of $2.03 to $2.07, the midpoint ($2.05) of which is less than the Zacks Consensus Estimate of $2.06.
The company expects global client revenue growth to be 5-6% year over year and adjusted operating income margin is anticipated to be around 15.5%.
Equifax (EFX - Free Report) reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis.
IQVIA Holdings (IQV - Free Report) reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis.
Robert Half (RHI - Free Report) reported second-quarter 2020 earnings of 41 cents per share beat the consensus mark by 17% but were down 58% year over year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Genpact (G) Stock up 1.6% Since Q2 Earnings: Here's Why
Shares of Genpact Limited (G - Free Report) have gained 1.6% since it reported its second-quarter 2020 results on Aug 7, outperforming the 1.4% growth of the industry it belongs to.
The outperformance can be attributed to the company’s impressive second-quarter 2020 results wherein both earnings and revenues beat the Zacks Consensus Estimate.
Adjusted earnings per share of 52 cents outpaced the consensus mark by 48.6% and increased 6% year over year. This upside was driven by higher operating income of 4 cents, partially offset by negative impact of a penny each from higher interest expense.
Revenues amounted to $900 million, which beat the consensus estimate by 7.4% and improved 2% year over year on a reported and 3% on a constant-currency basis. The top line was aided by strength across global client and GE businesses.
Quarter Details
Global Clients (87% of total revenues) revenues climbed 3% year over year on a reported basis and 4% on a constant-currency basis to $783 million. This growth was driven by enhanced revenue coverage associated with transition to remote-working model and stronger client demand for transformation services. General Electric revenues of $117 million declined 2% year over year and contributed 13% to total revenues.
Adjusted income from operations totaled $145 million, up 7% year over year. Adjusted operating income margin of 16.2% improved 80 basis points (bps) year over year.
Genpact Limited Price, Consensus and EPS Surprise
Genpact Limited price-consensus-eps-surprise-chart | Genpact Limited Quote
Genpact exited the quarter with cash and cash equivalents of $867.4 million compared with the $401.6 million recorded at the end of the previous quarter. Long-term debt (less current portion) totaled $1.3 billion, more or less flat with the prior quarter.
The company generated $192 million of cash from operating activities and capex was $16.3 million. Genpact returned $19 million to shareholders through dividend payout in the quarter.
2020 Guidance
Genpact expects revenues to be between $3.63 and $3.67 billion, the midpoint ($3.65 billion) of which is less than the Zacks Consensus Estimate of $3.66 billion. Adjusted EPS is anticipated in the range of $2.03 to $2.07, the midpoint ($2.05) of which is less than the Zacks Consensus Estimate of $2.06.
The company expects global client revenue growth to be 5-6% year over year and adjusted operating income margin is anticipated to be around 15.5%.
Genpact currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Some Business Services Companies
Equifax (EFX - Free Report) reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis.
IQVIA Holdings (IQV - Free Report) reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis.
Robert Half (RHI - Free Report) reported second-quarter 2020 earnings of 41 cents per share beat the consensus mark by 17% but were down 58% year over year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>