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Maximus (MMS) Stock Up 3.2% Despite Q2 Earnings Miss
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MAXIMUS, Inc. (MMS - Free Report) reported mixed second-quarter fiscal 2023 results wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.
The stock has gained 3.2% since the earnings release on May 3, despite the lower-than-expected earnings performance.
Quarterly adjusted earnings (excluding 28 cents from non-recurring items) of 80 cents per share missed the Zacks Consensus Estimate by 2.6% but beat our estimate by 1.7% and decreased 25.2% year over year. Revenues of $1.21 billion beat the consensus mark by 1.3% and our estimate by 2.6%. The figure increased 2.5% year over year.
The U.S. Services segment’s revenues of $449.7 million, grew 13% year over year. The U.S. Federal Services segment’s revenues of $584.1 million, increased 1.9% from the year-ago reported quarter. The Outside the U.S. segment’s revenues of $173.1 million, decreased 16% year over year.
Sales and Pipeline
Year-to-date signed contract awards on Mar 31, totaled $1.22 billion, and contracts pending (awarded but unsigned) amounted to $1.27 billion. The sales pipeline on Mar 31 was $31.9 billion. This included $5.6 billion in pending proposals, $0.94 billion in proposals in preparation and $25.3 billion in opportunities tracking.
Operating Performance
Operating income of $62.5 million fell 17% year over year. The operating income margin of 5.2% was lower than the year-ago quarter’s 6.4%.
Balance Sheet and Cash Flow
MAXIMUS ended the quarter with cash and cash equivalents of $56.3 million, compared with $40.7 million reported on Sep 30, 2022.
The company generated $309.7 million of cash from operations. Capital expenditures were $18.1 million. Free cash flow amounted to $291.6 million.
2023 Guidance
MAXIMUS expects fiscal 2023 revenues to be in the range of $4.85-$5 billion. The midpoint of the guided range ($4.925 billion) is below the current Zacks Consensus Estimate of $4.94 billion. Adjusted earnings per share are expected to be in the range of $4.00 and $4.30 per. The midpoint of the guided range ($4.15) is below the current Zacks Consensus Estimate of earnings of $4.29 per share.
Free cash flow is anticipated in the range of $225-$275 million. Interest expenses are expected to be between $82 million and $85 million. The effective tax rate is anticipated in the range of 24.5-25.5%. Weighted average shares outstanding are projected in the range of 61.2-61.3 million.
Equifax (EFX - Free Report) reported better-than-expected first-quarter 2023 results. Adjusted earnings (excluding 52 cents from non-recurring items) came in at $1.43 per share, beating the Zacks Consensus Estimate by 4.4% but declining 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% on a reported basis from the year-ago figure. The top line was down 3% on a local currency basis.
Omnicom (OMC - Free Report) reported better-than-expected first-quarter 2023 results. OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13% and our estimates by 11.4%. Earnings per share increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.
Fiserv, Inc. reported impressive first-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Adjusted earnings per share (excluding 69 cents from non-recurring items) of $1.58 increased 12.9% year over year, beating the consensus mark by 1.3%. Earnings beat our estimate by 2.6%. Adjusted revenues of $4.28 billion beat the Zacks Consensus Estimate by 3% and increased 9.5% year over year. Revenues surpassed our estimates by 4.65%.
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Maximus (MMS) Stock Up 3.2% Despite Q2 Earnings Miss
MAXIMUS, Inc. (MMS - Free Report) reported mixed second-quarter fiscal 2023 results wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.
The stock has gained 3.2% since the earnings release on May 3, despite the lower-than-expected earnings performance.
Quarterly adjusted earnings (excluding 28 cents from non-recurring items) of 80 cents per share missed the Zacks Consensus Estimate by 2.6% but beat our estimate by 1.7% and decreased 25.2% year over year. Revenues of $1.21 billion beat the consensus mark by 1.3% and our estimate by 2.6%. The figure increased 2.5% year over year.
Maximus, Inc. Price, Consensus and EPS Surprise
Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote
Segmental Revenues
The U.S. Services segment’s revenues of $449.7 million, grew 13% year over year. The U.S. Federal Services segment’s revenues of $584.1 million, increased 1.9% from the year-ago reported quarter. The Outside the U.S. segment’s revenues of $173.1 million, decreased 16% year over year.
Sales and Pipeline
Year-to-date signed contract awards on Mar 31, totaled $1.22 billion, and contracts pending (awarded but unsigned) amounted to $1.27 billion. The sales pipeline on Mar 31 was $31.9 billion. This included $5.6 billion in pending proposals, $0.94 billion in proposals in preparation and $25.3 billion in opportunities tracking.
Operating Performance
Operating income of $62.5 million fell 17% year over year. The operating income margin of 5.2% was lower than the year-ago quarter’s 6.4%.
Balance Sheet and Cash Flow
MAXIMUS ended the quarter with cash and cash equivalents of $56.3 million, compared with $40.7 million reported on Sep 30, 2022.
The company generated $309.7 million of cash from operations. Capital expenditures were $18.1 million. Free cash flow amounted to $291.6 million.
2023 Guidance
MAXIMUS expects fiscal 2023 revenues to be in the range of $4.85-$5 billion. The midpoint of the guided range ($4.925 billion) is below the current Zacks Consensus Estimate of $4.94 billion. Adjusted earnings per share are expected to be in the range of $4.00 and $4.30 per. The midpoint of the guided range ($4.15) is below the current Zacks Consensus Estimate of earnings of $4.29 per share.
Free cash flow is anticipated in the range of $225-$275 million. Interest expenses are expected to be between $82 million and $85 million. The effective tax rate is anticipated in the range of 24.5-25.5%. Weighted average shares outstanding are projected in the range of 61.2-61.3 million.
MAXIMUS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Equifax (EFX - Free Report) reported better-than-expected first-quarter 2023 results. Adjusted earnings (excluding 52 cents from non-recurring items) came in at $1.43 per share, beating the Zacks Consensus Estimate by 4.4% but declining 35.6% from the year-ago figure. Total revenues of $1.3 billion surpassed the consensus estimate by 1.5% but decreased 4.5% on a reported basis from the year-ago figure. The top line was down 3% on a local currency basis.
Omnicom (OMC - Free Report) reported better-than-expected first-quarter 2023 results. OMC’s earnings of $1.56 per share beat the Zacks Consensus Estimate by 13% and our estimates by 11.4%. Earnings per share increased 12.2% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 2.3% and our estimate by 1.4%. The top line increased 1% year over year.
Fiserv, Inc. reported impressive first-quarter 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Adjusted earnings per share (excluding 69 cents from non-recurring items) of $1.58 increased 12.9% year over year, beating the consensus mark by 1.3%. Earnings beat our estimate by 2.6%. Adjusted revenues of $4.28 billion beat the Zacks Consensus Estimate by 3% and increased 9.5% year over year. Revenues surpassed our estimates by 4.65%.