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Broadridge (BR) Q1 Earnings & Revenues Top Estimates, Up Y/Y

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Broadridge Financial Solutions, Inc. (BR - Free Report) delivered strong first-quarter fiscal 2021 results, beating the Zacks Consensus Estimate on both counts.

Adjusted earnings of 98 cents per share beat the consensus estimate by 55.6% and improved 44% year over year. Total revenues of $1 billion beat the consensus mark by 5.8% and were up 7% year over year. The company generated closed sales of $33 million in the quarter, down 13% year over year.

So far this year, shares of Broadridge have gained 13.4% against 5% decline of the industry it belongs to.

Revenues by Segment

Revenues in the Investor Communication Solutions segment increased 7% from the year-ago quarter’s level to $753 million.

The segment’s recurring fee revenues were up 8% to $671 million. Event-driven fee revenues increased 13% to $45.5 million. Distribution revenues increased 7% to $752.9 million on lower event-driven activity.

Global Technology and Operations segment's recurring fee revenues came in at $296 million, up 8% year over year. This improvement was driven by acquisitions and organic growth. Higher equity trading volumes benefited the segment’s internal growth.

Operating Results

Adjusted operating income of $151 million improved 45% year over year. Adjusted operating income margin increased to 14.8% from 10.9% in the prior-year quarter.

Balance Sheet and Cash Flow

Broadridge exited the quarter with cash and cash equivalents of $356.6 million compared with the $476.6 million witnessed at the end of the prior quarter. Long-term debt was $1.8 billion compared with the $1.4 billion recorded at the end of the previous quarter.

The company used $44.2 million of cash in operating activities and capex was $14.3 million in the quarter. Broadridge paid out $62.2 million in dividends in the reported quarter.

Updated Fiscal 2021 Guidance

Broadridge expects total revenue growth in the range of 1-4% (previous range was 0-4%). It anticipates recurring revenue growth of 3-6 %( previous range was 2-6%). Adjusted EPS growth is expected to be 6% to 10% (previous estimation was 4-10%). Adjusted operating income margin is estimated to be up by around 100 basis points (unchanged from previous guidance). Closed sales are anticipated to be between $190 million and $235 million (unchanged from previous guidance).

Broadridge 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

Equifax (EFX - Free Report) reported better-than-expected third-quarter 2020 results, with adjusted earnings of $1.87 per share beating the Zacks Consensus Estimate by 16.2% and rising 26.4% on a year-over-year basis. The reported figure exceeded the guidance of $1.30-$1.40.

The Interpublic Group of Companies (IPG - Free Report) reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and rose 8.2% on a year-over-year basis.

IQVIA Holdings (IQV - Free Report) reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and improved 1.9% on a year-over-year basis. The reported figure was above the guidance of $1.47-$1.55.

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