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Genpact (G) Beats on Q3 Earnings, Up 2.4% on Solid EPS View

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Genpact Limited (G - Free Report) reported better-than-expected third-quarter 2021 results.

The stock climbed 2.4% since the earnings release on Nov 10, as the company’s earnings guidance for 2021 was impressive. Genpact raised the guidance range for adjusted EPS to $2.4-$2.43 from $2.36-$2.39 guided previously. The raised guidance range is above the current Zacks Consensus Estimate of $2.39.

Genpact's quarterly adjusted EPS of 66 cents outpaced the Zacks Consensus Estimate by 15.8% and inched up 18% year over year. Revenues amounted to $1.02 billion, which beat the consensus estimate by 0.4% and increased 9% year over year on a reported basis and 8% on a constant-currency (cc) basis.

Genpact’s shares have gained 26.5% in the past year, underperforming the 31.5% growth of the industry it belongs to.

Genpact Limited Price, Consensus and EPS Surprise Genpact Limited Price, Consensus and EPS Surprise

Quarter Details

Global Clients (91% of total revenues) revenues climbed 12% year over year on a reported basis and 11% at cc to $921 million.  The upside was driven by strong growth in Transformation Services.

General Electric revenues of $95 million declined 19% year over year and contributed 9% of total revenues. The downside was mainly due to productivity commitments and macroeconomic impact.  

Adjusted income from operations totaled $169 million, up 6% year over year. Adjusted operating income margin of 16.6% declined 50 basis points (bps) year over year.

Genpact exited the quarter with cash and cash equivalents of $922 million compared with $680 million recorded at the end of the previous quarter. Long-term debt totaled $1.3 billion, flat with the prior quarter figure.

The company generated $210 million of cash from operating activities and capex was $12 million. Genpact returned $20 million to shareholders through dividends in the quarter.

2021 Guidance

Revenues are continued to be anticipated to be between $3.96 to $4 billion, the midpoint ($3.98 billion) of which is below the current Zacks Consensus Estimate of $3.99 billion. Genpact continues to expect Global Clients’ revenue growth to be 10.5%-11.5% on a reported basis and 9%-10% at cc. Adjusted income from operations margin is expected to be approximately at 16.5%,

Cash flow from operations is anticipated to be $550 million, higher than the prior expectation of at least $500 million.

Genpact currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Some Other Business Services Companies

Some other stocks from the Business Services sector to have reported earnings this season are Equifax (EFX - Free Report) , IQVIA Holdings (IQV - Free Report) and Omnicom (OMC - Free Report) .

Equifax reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.

Equifax currently carries a Zacks Rank #3. The stock gained 69.6% over the past year against 13.7% decline of the industry it belongs to.

IQVIA reported impressive third-quarter 2021 results, with earnings per share of $2.17, beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.

IQVIA carries a Zacks Rank #3. The stock gained 50.5% over the past year against 16.1% decline of the industry it belongs to.

Omnicom reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.

Omnicom also carries a Zacks Rank #3. The stock appreciated 23.8% over the past year, underperforming the 34.9% growth of the industry it belongs to.


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Omnicom Group Inc. (OMC) - free report >>

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IQVIA Holdings Inc. (IQV) - free report >>

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