Maximus, Inc.’s ( MMS Quick Quote MMS - Free Report) third-quarter fiscal 2023 earnings and revenues missed the Zacks Consensus Estimate.
The stock has declined 3.6% since the earnings release on Aug 2 in response to the lower-than-expected results and trimmed guidance.
Maximus currently expects adjusted earnings to be in the range of $3.74-$3.94 per share compared with the previous guidance of $4.00-$4.30 per share. The revised guided range is below the current Zacks Consensus Estimate of earnings of $4.1 per share.
Fiscal 2023 revenues are expected to be in the range of $4.875-$4.975 billion compared with the previous guidance of $4.85-$5 billion. The midpoint ($4.925 billion) is, however, slightly higher than the current Zacks Consensus Estimate of $4.91 billion.
Quarterly adjusted earnings of 78 cents per share missed the Zacks Consensus Estimate by 31.6% and remained flat year over year. Revenues of $1.19 billion lagged the consensus mark by 1.3% but increased 5.6% year over year.
Maximus shares have gained 24.8% over the past year compared with the 28.3% growth of the
industry it belongs to. Segmental Revenues
The U.S. Services segment’s revenues of $449.1 million grew 12.5% year over year and beat our estimate of $434 million. The U.S. Federal Services segment’s revenues of $584 million increased 11.1% from the year-ago reported number and surpassed our estimate of $578.3 million. The Outside the U.S. segment’s revenues of $155.7 million decreased 22.5% year over year and lagged our estimate of $191.2 million.
Sales and Pipeline
Year-to-date signed contract awards, as of Jun 30, totaled $4.27 billion and contracts pending (awarded but unsigned) amounted to $3.1 billion. The sales pipeline as of Jun 30 was $32.1 billion. This included $2.6 billion in pending proposals, $0.84 billion in proposals in preparation and $28.7 billion in opportunities tracking.
The book-to-bill ratio as of Jun 30, 2023, was 2.2x. The book-to-bill ratio, excluding the Contact Center Operations contract of $6.6 billion received in September 2022, was 1.1x as of Jun 30, 2023.
Adjusted operating income of $81.8 million increased 5.9% year over year. This compares with our expected adjusted operating income of $113.7 million, up 47.2% year over year.
Adjusted operating income margin of 6.9% remained flat year over year. This compares with our expected adjusted operating income margin of 9.4%, up 250 basis points year over year.
Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalents balance of $35 million compared with $56.3 million reported at the end of the prior quarter.
The company used $5.3 million in cash from operations. Capital expenditures were $25.1 million and free cash flow amounted to $30.4 million.
Currently, Maximus carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here . Recent Earnings Snapshots of Some Service Providers Omnicom ( OMC Quick Quote OMC - Free Report) reported mixed second-quarter 2023 results, wherein the company’s earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
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IPG’s adjusted earnings came in at 74 cents per share, beating the Zacks Consensus Estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.