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Why Is Broadridge Financial (BR) Down 3.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Broadridge Financial Solutions (BR - Free Report) . Shares have lost about 3.1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Broadridge Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Broadridge’s Q3 Earnings Beat Estimates
Broadridge Financial Solutions reported mixed third-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings of $1.93 per share beat the consensus estimate by 9% and were up 9.7% year over year. Total revenues of $1.5 billion missed the consensus mark by a slight margin and were up 10.4% year over year.
Recurring fee revenues of $1 billion increased 16% from the year-ago quarter’s level. The company generated closed sales of $58 million in the quarter, up 33% year over year.
Revenues by Segment
Revenues in the Investor Communication Solutions segment increased 6% from the year-ago quarter’s level to $1.2 billion. Global Technology and Operations segment revenues came in at $381 million, up 29% from the year-ago quarter’s figure. The improvement was mainly driven by the Itiviti acquisition and new businesses, and was partially offset by a reduction in internal trade growth.
Operating Results
Adjusted operating income of $313 million increased 10% year over year. Adjusted operating income margin stayed flat year over year at 20.4%.
Balance Sheet and Cash Flow
Broadridge exited the quarter with cash and cash equivalents of $277.2 million compared with $281.2 million at the end of the prior quarter. Long-term debt was $4.2 billion, flat with the prior-quarter tally.
The company generated $80.7 million of cash from operating activities and capex was $10.6 million in the quarter. Broadridge paid out $74.7 million in dividends in the reported quarter.
Fiscal Guidance
Broadridge expects recurring revenue growth at the higher end of 12-15%. Adjusted earnings per share growth is expected to be 13-15%. Adjusted operating income margin is estimated to be up by around 18.5%. Closed sales are anticipated between $240 million and $280 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Broadridge Financial has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Broadridge Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Broadridge Financial (BR) Down 3.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Broadridge Financial Solutions (BR - Free Report) . Shares have lost about 3.1% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Broadridge Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Broadridge’s Q3 Earnings Beat Estimates
Broadridge Financial Solutions reported mixed third-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings of $1.93 per share beat the consensus estimate by 9% and were up 9.7% year over year. Total revenues of $1.5 billion missed the consensus mark by a slight margin and were up 10.4% year over year.
Recurring fee revenues of $1 billion increased 16% from the year-ago quarter’s level. The company generated closed sales of $58 million in the quarter, up 33% year over year.
Revenues by Segment
Revenues in the Investor Communication Solutions segment increased 6% from the year-ago quarter’s level to $1.2 billion. Global Technology and Operations segment revenues came in at $381 million, up 29% from the year-ago quarter’s figure. The improvement was mainly driven by the Itiviti acquisition and new businesses, and was partially offset by a reduction in internal trade growth.
Operating Results
Adjusted operating income of $313 million increased 10% year over year. Adjusted operating income margin stayed flat year over year at 20.4%.
Balance Sheet and Cash Flow
Broadridge exited the quarter with cash and cash equivalents of $277.2 million compared with $281.2 million at the end of the prior quarter. Long-term debt was $4.2 billion, flat with the prior-quarter tally.
The company generated $80.7 million of cash from operating activities and capex was $10.6 million in the quarter. Broadridge paid out $74.7 million in dividends in the reported quarter.
Fiscal Guidance
Broadridge expects recurring revenue growth at the higher end of 12-15%. Adjusted earnings per share growth is expected to be 13-15%. Adjusted operating income margin is estimated to be up by around 18.5%. Closed sales are anticipated between $240 million and $280 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, Broadridge Financial has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Broadridge Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.