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Gartner (IT) Beats Q3 Earnings Estimates, Raises 2020 View

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Gartner, Inc. (IT - Free Report) reported better-than-expected third-quarter 2020 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of 91 cents beat the consensus mark by 78.4% and increased 30% year over year. Revenues of $995 million beat the consensus estimate by 6.4% but declined 0.6% year over year on a reported basis and 1% on a foreign currency-neutral basis.

Total contract value was $3.4 billion, up 5.3% year over year on a foreign currency-neutral basis.

So far this year, shares of Gartner have lost 18.9% against 1% growth of the industry it belongs to and 2.3% increase of the Zacks S&P 500 composite.

 

Quarterly Numbers in Detail

Revenues at the Research segment increased 6.2% year over year on a reported basis and 5.8% on a foreign currency-neutral basis to $893 million. Gross contribution margin was 72% in the reported quarter.

Revenues at the Conferences segment declined 80.8% year over year on a reported basis and 81.1% on a foreign currency-neutral basis to $13 million. Gross contribution margin was 16% in the reported quarter.

Revenues at the Consulting segment declined 4.4% year over year on a reported basis and 5.6% on a foreign currency-neutral basis to $89 million. Gross contribution margin was 31.6% in the reported quarter.

Adjusted EBITDA of $168 million improved 20% year over year on a reported basis and 19.4% on a foreign currency-neutral basis.

Operating cash flow totaled $244 million and free cash flow was $229 million in the reported quarter. Capital expenditures totaled $15 million.

Gartner, Inc. Price, Consensus and EPS Surprise

 

Gartner, Inc. Price, Consensus and EPS Surprise

Gartner, Inc. price-consensus-eps-surprise-chart | Gartner, Inc. Quote

2020 View

Gartner raised its full-year 2020 guidance. The company now expects total revenues to be $4.05 billion compared with the prior guidance of $3.88 billion. The current Zacks Consensus Estimate of $3.90 billion is below the updated guidance.

Adjusted EPS is anticipated to be $4.07 compared with the prior guidance of $3.08. The current Zacks Consensus Estimate of $3.19 is below the updated guidance.

Adjusted EBITDA is projected to be $740 million compared with the prior guidance of $635 million. Free cash flow is anticipated to be $625 million compared with the prior guidance of $425 million.

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

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 improving 26.4% on a year-over-year basis. The reported figure exceeded the guided range 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 improved 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 guided range of $1.47-$1.55.

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