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MAXIMUS (MMS) Misses on Q3 Earnings, Trims '22 EPS View
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MAXIMUS, Inc. (MMS - Free Report) reported mixed third-quarter fiscal 2022 results with earnings missing the Zacks Consensus Estimate but revenues beating the same.
The stock fell 3.6% since the earnings release on Aug 3 in response to the earnings miss and a lower earnings guidance for fiscal 2022. MAXIMUS trimmed its 2022 adjusted EPS guidance to $3.95-$4.15 from the previous view of $4.07-$4.57. The updated guidance range, however, is above the current Zacks Consensus Estimate of $4.
Quarterly adjusted earnings of 78 cents per share missed the Zacks Consensus Estimate by 20.4% and decreased 53% year over year. The bottom line in the quarter was weighed down by a contract in the Outside the U.S. Segment that required a write-down of $11.7 million or $0.14 EPS, a decline in short-term COVID-19 response work and lower volumes in core programs.
Revenues of $1.1 billion beat the consensus mark by 3.4% but decreased 9.5% year over year. The decrease was due to a decline in short-term COVID-19 response work, partially offset by organic growth and contributions from the acquisitions in the U.S. Federal Services segment.
MAXIMUS’s shares have lost 21% over the past year against 5.3% growth in the industry it belongs to.
Segmental Revenues
The U.S. Services segment’s revenues of $399 million decreased 8.5% year over year. The U.S. Federal Services segment’s revenues of $526 million declined 14.9% from the year-ago quarter’s reported figure. Outside the U.S. segment revenues of $201 million increased 6% year over year.
Sales and Pipeline
Year-to-date signed contract awards on Jun 30, 2022 totaled $4 billion, and contracts pending (awarded but unsigned) amounted to $476 million. The sales pipeline on Jun 30, 2022, was $33.5 billion. This included $7.3 billion in pending proposals, $3.6 billion in proposals in preparation and $21.6 billion in opportunities tracking.
Operating Performance
Operating income of $54.6 million declined 4.8% year over year. The operating income margin of 4.8% was lower than the year-ago quarter’s 11.2%.
Balance Sheet and Cash Flow
MAXIMUS ended the quarter with cash and cash equivalents of $93.7 million compared with $92.6 million in the prior quarter.
The company generated $57.9 million of cash from operations. Capital expenditures were $13 million. Free cash flow amounted to $44.9 million.
Updated 2022 Outlook
MAXIMUS tweaked its revenue guidance for 2022. The company currently expects revenues in the range of $4.55-$4.65 billion compared with the previous guidance of $4.5-$4.7 billion.
Cash flows from operations are expected between $220 million and $260 million compared with the previous guidance of $275-$325 million. Free cash flow is anticipated in the range of $170-$210 million compared with the prior expectation of $225-$275 million. The effective tax rate is anticipated in the range of 25-25.5%. Weighted average shares outstanding are projected in the range of 61.8-62 million.
MAXIMUS currently carries a Zacks Rank #5 (Strong Sell).
Performances of Some Other Business Services Companies
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.
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MAXIMUS (MMS) Misses on Q3 Earnings, Trims '22 EPS View
MAXIMUS, Inc. (MMS - Free Report) reported mixed third-quarter fiscal 2022 results with earnings missing the Zacks Consensus Estimate but revenues beating the same.
The stock fell 3.6% since the earnings release on Aug 3 in response to the earnings miss and a lower earnings guidance for fiscal 2022. MAXIMUS trimmed its 2022 adjusted EPS guidance to $3.95-$4.15 from the previous view of $4.07-$4.57. The updated guidance range, however, is above the current Zacks Consensus Estimate of $4.
Quarterly adjusted earnings of 78 cents per share missed the Zacks Consensus Estimate by 20.4% and decreased 53% year over year. The bottom line in the quarter was weighed down by a contract in the Outside the U.S. Segment that required a write-down of $11.7 million or $0.14 EPS, a decline in short-term COVID-19 response work and lower volumes in core programs.
Revenues of $1.1 billion beat the consensus mark by 3.4% but decreased 9.5% year over year. The decrease was due to a decline in short-term COVID-19 response work, partially offset by organic growth and contributions from the acquisitions in the U.S. Federal Services segment.
MAXIMUS’s shares have lost 21% over the past year against 5.3% growth in the industry it belongs to.
Segmental Revenues
The U.S. Services segment’s revenues of $399 million decreased 8.5% year over year. The U.S. Federal Services segment’s revenues of $526 million declined 14.9% from the year-ago quarter’s reported figure. Outside the U.S. segment revenues of $201 million increased 6% year over year.
Sales and Pipeline
Year-to-date signed contract awards on Jun 30, 2022 totaled $4 billion, and contracts pending (awarded but unsigned) amounted to $476 million. The sales pipeline on Jun 30, 2022, was $33.5 billion. This included $7.3 billion in pending proposals, $3.6 billion in proposals in preparation and $21.6 billion in opportunities tracking.
Operating Performance
Operating income of $54.6 million declined 4.8% year over year. The operating income margin of 4.8% was lower than the year-ago quarter’s 11.2%.
Balance Sheet and Cash Flow
MAXIMUS ended the quarter with cash and cash equivalents of $93.7 million compared with $92.6 million in the prior quarter.
The company generated $57.9 million of cash from operations. Capital expenditures were $13 million. Free cash flow amounted to $44.9 million.
Updated 2022 Outlook
MAXIMUS tweaked its revenue guidance for 2022. The company currently expects revenues in the range of $4.55-$4.65 billion compared with the previous guidance of $4.5-$4.7 billion.
Cash flows from operations are expected between $220 million and $260 million compared with the previous guidance of $275-$325 million. Free cash flow is anticipated in the range of $170-$210 million compared with the prior expectation of $225-$275 million. The effective tax rate is anticipated in the range of 25-25.5%. Weighted average shares outstanding are projected in the range of 61.8-62 million.
MAXIMUS currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Maximus, Inc. Price, Consensus and EPS Surprise
Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote
Performances of Some Other Business Services Companies
Equifax (EFX - Free Report) reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.
EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.
IQVIA Holdings (IQV - Free Report) reported solid second-quarter 2022 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.
IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.
Omnicom Group (OMC - Free Report) reported impressive second-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.