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Genpact's (G) Q4 Earnings Surpass Estimates, Improve Y/Y

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

Adjusted EPS of 54 cents outpaced the Zacks Consensus Estimate by 1.9% and inched up 6% year over year. Revenues amounted to $1.07 billion, which beat the consensus estimate by 2.8% and increased 13% year over year on a reported as well as a constant-currency (cc) basis.

Genpact’s shares have gained 6.5% in the past year, underperforming the 17.8% growth of the industry it belongs to.

Quarter Details

Global Clients (91% of total revenues) revenues climbed 16% year over year on a reported basis as well as at cc to $979 million.  The upside was driven by strong growth in Transformation Services.

General Electric revenues of $93 million declined 14% year over year and contributed 9% to total revenues. The downside was mainly due to short-cycle project work. 

Adjusted income from operations totaled $154 million, up 4% year over year. Adjusted operating income margin of 14.4% declined 110 basis points (bps) year over year.

Genpact exited the quarter with cash and cash equivalents of $899.5 million compared with $922 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 $247 million of cash from operating activities, and capex was $22 million. Genpact returned $20 million to shareholders through dividends and $151 million through share repurchase in the quarter.

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

Genpact Limited price-consensus-eps-surprise-chart | Genpact Limited Quote

2022 Guidance

Genpact’s guided range for adjusted EPS is $2.53-$2.71, the midpoint ($2.62) of which is slightly below the current Zacks Consensus Estimate of $2.67. Revenues are anticipated to be between $4.3 billion and $4.4 billion, the midpoint ($4.35 billion) of which is below the current Zacks Consensus Estimate of $4.36 billion.

Genpact expects Global Clients’ revenue growth to be 8-11% on a reported basis and 9-12% at cc. Adjusted income from operations margin is expected to be 16-16.5%.

Genpact 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 Some Other Business Services Companies

Robert Half International (RHI - Free Report) delivered fourth-quarter 2021 earnings of $1.51 per share that beat the consensus mark by 5.6% and rose 79.8% year over year.

Revenues of $1.77 billion surpassed the consensus mark by 4.3% and increased 36.2% year over year on a reported basis and 36% on an as-adjusted basis. RHI currently carries a Zacks Rank #1.

Automatic Data Processing (ADP - Free Report) reported better-than-expected second-quarter fiscal 2022 results. Adjusted EPS of $1.65 beat the Zacks Consensus Estimate by 1.2% and rose 9% year over year.

Total revenues of $4.03 billion beat the consensus mark by 1.1% and increased 9% year over year. ADP currently carries a Zacks Rank #2.

Rollins (ROL - Free Report) reported mixed fourth-quarter 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. Adjusted earnings of 14 cents per share met the Zacks Consensus Estimate and increased 7.7% year over year.

Revenues of $600.3 million beat the consensus mark by 3.3% and rose 11.9% year over year. ROL currently carries a Zacks Rank #2.

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