Genpact Limited ( G Quick Quote G - Free Report) reported better-than-expected second-quarter 2021 results.
The stock climbed 2.2% since the earnings release on Aug 5, as the company’s guidance for 2021 was impressive. Adjusted EPS is currently anticipated in the range of $2.36-$2.39 per share compared with the previous guidance of $2.27-2.30 per share. The raised guidance range is above the Zacks Consensus Estimate of $2.33. Revenues are anticipated between $3.96 to $4 billion compared with the prior guidance of $3.93 to $3.99 billion. The midpoint ($3.98 billion) of the range is same as the Zacks Consensus Estimate.
Quarterly adjusted EPS of 66 cents outpaced the Zacks Consensus Estimate by 22.2% and inched up 27% year over year. Revenues amounted to $988.1 million, which beat the consensus estimate by 2.4% and increased 10% year over year on a reported basis and 7% on a constant-currency (cc) basis.
Genpact’s shares have gained 21.5% in the past year, underperforming the 45.9% rally of the
industry it belongs to. Quarter Details
Global Clients (90% of total revenues) revenues climbed 14% year over year on a reported basis and 11% at cc to $893 million. The upside was driven by strong growth in Transformation Services.
General Electric revenues of $95 million declined 19% year over year and contributed 10% to total revenues. The downside was mainly due to productivity commitments and macroeconomic impact.
Adjusted income from operations totaled $177 million, up 22% year over year. Adjusted operating income margin of 17.9% moved up 170 basis points (bps) year over year.
Genpact exited the quarter with cash and cash equivalents of $680.4 million compared with $644 million recorded at the end of the previous quarter. Long-term debt totaled $1.3 billion compared with $1.6 billion recorded in the prior quarter.
The company generated $160.6 million of cash from operating activities and capex was $7.3 million. Genpact returned $13 million to shareholders through share repurchases and $20 million through dividends in the quarter.
Revised 2021 Guidance
The company currently expects Global Clients' revenue growth to be 10.5%-11.5% compared with the previous guidance of 9-10%. At cc this revenue is expected to grow 9-11% compared with the prior guidance of 8-10%.
Adjusted income from operations margin is expected to be approximately at 16.5%, up from the previous expectation of 16%.
Genpact currently carries a Zacks Rank #2 (Buy). You can see
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