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ICF International (ICFI) Q2 Earnings Beat Estimates, Up Y/Y

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ICF International, Inc. (ICFI - Free Report) delivered impressive second-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate. However, better-than-expected results failed to impress the market as there has not been any major price change since the earnings release on Aug 3.

Non-GAAP earnings (excluding 12 cents from non-recurring items) of $1.19 per share surpassed the Zacks Consensus Estimate by 21.4% and increased 33.7% on a year-over-year basis. Revenues of $392.5 million surpassed the consensus mark by 4.3% and increased 5.2% year over year owing to 7.7% year-over-year increase in service revenues.

Notably, the stock has increased 24.9% in the past year compared with 2.6% growth of the industry it belongs to.

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Revenues in Detail

Revenues from government clients came in at $278 million, up 13% on a year-over-year basis. The U.S. federal government revenues of $182.2 million increased 6.7% year over year and contributed 46% to total revenues.  The U.S. state and local government revenues of $58.1 million moved up 1.2% year over year and contributed 15% to total revenues.

International government revenues of $37.8 million were up 111.7% year over year, contributing 10% to total revenues. This surge was driven by significant pass-through revenues.

Commercial revenues totaled $114.5 million, up 6% from the year-ago quarter’s figure and contributed 29% of total revenues. Energy markets and marketing services contributed 57% and 33%, respectively, to commercial revenues.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $3 billion and $1.5 billion at the end of the quarter, respectively. The total value of contracts awarded in the quarter came in at $398 million, up 41% year over year.

ICF International, Inc. Price, Consensus and EPS Surprise

 

ICF International, Inc. Price, Consensus and EPS Surprise

ICF International, Inc. price-consensus-eps-surprise-chart | ICF International, Inc. Quote

 

Operational Results

Adjusted EBITDA of $40 million increased 23.1% from the year-ago quarter’s figure. Adjusted EBITDA margin on revenues of 10.2% increased 100 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 14.2%, up 180 bps year over year.

Balance Sheet

ICF exited the second quarter with cash and cash equivalent balance of $9.6 million compared with $8.6 million recorded at the end of the previous quarter. The company had a long-term debt of $321.7 million compared with $314.5 million at the end of the prior quarter.

The company generated around $1.4 million of cash from operating activities and capex was $3.8 million. ICF paid out dividends of $2.6 million in the quarter.

Dividend Declared

On Aug 3, 2021, ICF declared a quarterly cash dividend of 14 cents per share. The dividend will be paid out to stockholders on Oct 13, as of record date Sep 10.

Reiterates 2021 Guidance

ICF expects non-GAAP earnings per share (EPS) in the range of $4.35-$4.65. The midpoint ($4.50) of the guidance is below the current Zacks Consensus Estimate of $4.59.

Revenues are projected in the range of $1.525-$1.575 billion. The midpoint ($1.55 billion) of the guidance is below the current Zacks Consensus Estimate of $1.56 billion.

EBITDA is expected in the range of $145-$155 million. ICF currently carries a Zacks Rank #2 (Buy). 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 second-quarter 2021 results. Adjusted earnings of $1.98 per share beat the Zacks Consensus Estimate by 15.8% and increased 23.8% on a year-over-year basis. Revenues of $1.23 billion outpaced the consensus estimate by 6.4% and rose 25.6% year over year.

IHS Markit’s (INFO - Free Report) second-quarter fiscal 2021 adjusted EPS of 81 cents beat the consensus mark by 1.3% and increased 17.4% on a year-over-year basis. Total revenues came in at $1.2 billion, surpassing the consensus mark by 3.8% and increasing 15% from the year-ago quarter.

Omnicom (OMC - Free Report) reported second-quarter 2021 adjusted earnings of $1.46 per share that beat the consensus mark by 9.8% and increased 58.7% year over year. Total revenues of $3.6 billion surpassed the consensus estimate by 6.7% and increased 27.5% year over year.