Back to top

Image: Bigstock

Genpact's (G) Earnings and Revenues Beat Estimates in Q4

Read MoreHide Full Article

Genpact Limited (G - Free Report) reported better-than-expected fourth-quarter 2020 results.

Quarterly adjusted earnings per share of 51 cents outpaced the Zacks Consensus Estimate by 2% but declined 11% year over year. Revenues amounted to $951 million, which beat the consensus estimate by 1.8% and improved 1% year over year on a reported as well as constant-currency basis. The top line was aided by strength in Global Clients business.

Notably, Genpact’s shares have gained 5% over the past six months, significantly underperforming the 18.4% rally of the industry it belongs to.

Quarter Details

Global Clients (89% of total revenues) revenues climbed 4% year over year on a reported and 3% on a constant-currency basis to $841 million. This growth was driven by strong growth of Transformation Services. General Electric revenues of $109 million declined 16% year over year and contributed 11% to total revenues. The decline was mainly due to macroeconomic impact and planned productivity commitments. Adjusted income from operations totaled $148 million, down 7% year over year. Adjusted operating income margin of 15.5% declined 140 basis points (bps) year over year.

Genpact exited the quarter with cash and cash equivalents of $680 million compared with $803 million recorded at the end of the previous quarter. Long-term debt totaled $1.3 billion, flat with the prior quarter.

The company generated $159 million of cash from operating activities and capex was $22 million. Genpact returned $63 million to shareholders through share repurchases and $18 million through dividends in the quarter.

Raised 2020 Guidance

Genpact raised its 2020 guidance.The company now expects revenues to be between $3.93 and $3.99 billion, compared with the prior guidance of $3.68 to $3.695 billion. The current Zacks Consensus Estimate is pegged at $3.93 billion.

The company currently expects Global Clients revenue growth to be 8-10% compared with 6-6.5% projected earlier. Adjusted operating income margin is anticipated to be around 16% compared with the prior anticipation of 15.7%.

Adjusted EPS is now anticipated in the range of $2.26 to 2.29 compared with $2.08 to $2.11 anticipated earlier. The midpoint of this raised guided range is same as the Zacks Consensus Estimate of $2.28.

Genpact 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

Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year-over-year.

IHS Markit’s  fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Esimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.

Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.

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 +24.9% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Automatic Data Processing, Inc. (ADP) - free report >>

Genpact Limited (G) - free report >>

Rollins, Inc. (ROL) - free report >>

Published in