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Maximus (MMS) Q4 Earnings Fall Short of Estimates, Decline Y/Y
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Maximus, Inc.’s (MMS - Free Report) fourth-quarter fiscal 2023 earnings and revenues missed the Zacks Consensus Estimate.
Quarterly adjusted earnings (excluding 33 cents from non-recurring items) of $1.29 per share missed the Zacks Consensus Estimate by 3.7% and decreased 7.9% year over year. Revenues of $1.26 billion lagged the consensus mark by 1% but increased 7.1% year over year.
Segmental Revenues
The U.S. Services segment’s revenues of $473.8 million grew 11.8% year over year but missed our estimate of $483.6 million. The U.S. Federal Services segment’s revenues of $617.4 million increased 6.6% from the year-ago reported number and surpassed our estimate of $604.3 million. The Outside the U.S. segment’s revenues of $168.7 million decreased 3.2% year over year and lagged our estimate of $182.9 million.
Sales and Pipeline
Year-to-date signed contract awards, as of Sep 30, totaled $6.1 billion. Contracts pending (awarded but unsigned) amounted to $878 million. The sales pipeline, as of Sep 30, was $37.1 billion. This included $1.2 billion in pending proposals, $0.97 billion in proposals in preparation and $34.9 billion in opportunities tracking.
The book-to-bill ratio, as of Sep 30, 2023, was 1.2 on a trailing 12-month basis.
Operating Performance
Adjusted operating income of $125.98 million decreased 8% year over year. This compares with our expected adjusted operating income of $132.1 million, down 3.6% year over year. Adjusted operating income margin of 10% decreased 160 basis points year over year.
Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalents balance of $65.4 million compared with $35 million reported at the end of the prior quarter.
The company used $144.6 million in cash from operations. Capital expenditures were $31.8 million and free cash flow amounted to $112.8 million.
Total revenues are expected to be between $5.05 billion and $5.20 billion. The midpoint of the guided range ($1.965 billion) is below the Zacks Consensus Estimate of $1.97 billion.
Earnings (on an adjusted basis) are anticipated in the range of $5.05-$5.35 per share. The Zacks Consensus Estimate is pegged at $6.36 per share.
Adjusted operating income is expected to range between $488 million and $513 million. Free cash flow is expected to range between $290 million and $340 million for fiscal year 2024. The company forecasts interest expense of approximately $70 million, an effective income tax rate between 24.5% and 25.5%, and weighted average shares outstanding between 62.2 million and 62.3 million for fiscal year 2024.
Recent Earnings Snapshots of Some Service Providers
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis.
Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from a year ago.
EFX’s total revenues of $1.32 billion fell short of the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.
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Maximus (MMS) Q4 Earnings Fall Short of Estimates, Decline Y/Y
Maximus, Inc.’s (MMS - Free Report) fourth-quarter fiscal 2023 earnings and revenues missed the Zacks Consensus Estimate.
Quarterly adjusted earnings (excluding 33 cents from non-recurring items) of $1.29 per share missed the Zacks Consensus Estimate by 3.7% and decreased 7.9% year over year. Revenues of $1.26 billion lagged the consensus mark by 1% but increased 7.1% year over year.
Segmental Revenues
The U.S. Services segment’s revenues of $473.8 million grew 11.8% year over year but missed our estimate of $483.6 million. The U.S. Federal Services segment’s revenues of $617.4 million increased 6.6% from the year-ago reported number and surpassed our estimate of $604.3 million. The Outside the U.S. segment’s revenues of $168.7 million decreased 3.2% year over year and lagged our estimate of $182.9 million.
Sales and Pipeline
Year-to-date signed contract awards, as of Sep 30, totaled $6.1 billion. Contracts pending (awarded but unsigned) amounted to $878 million. The sales pipeline, as of Sep 30, was $37.1 billion. This included $1.2 billion in pending proposals, $0.97 billion in proposals in preparation and $34.9 billion in opportunities tracking.
Maximus, Inc. Price, Consensus and EPS Surprise
Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote
The book-to-bill ratio, as of Sep 30, 2023, was 1.2 on a trailing 12-month basis.
Operating Performance
Adjusted operating income of $125.98 million decreased 8% year over year. This compares with our expected adjusted operating income of $132.1 million, down 3.6% year over year. Adjusted operating income margin of 10% decreased 160 basis points year over year.
Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalents balance of $65.4 million compared with $35 million reported at the end of the prior quarter.
The company used $144.6 million in cash from operations. Capital expenditures were $31.8 million and free cash flow amounted to $112.8 million.
Currently, Maximus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fiscal 2024 Guidance
Total revenues are expected to be between $5.05 billion and $5.20 billion. The midpoint of the guided range ($1.965 billion) is below the Zacks Consensus Estimate of $1.97 billion.
Earnings (on an adjusted basis) are anticipated in the range of $5.05-$5.35 per share. The Zacks Consensus Estimate is pegged at $6.36 per share.
Adjusted operating income is expected to range between $488 million and $513 million. Free cash flow is expected to range between $290 million and $340 million for fiscal year 2024. The company forecasts interest expense of approximately $70 million, an effective income tax rate between 24.5% and 25.5%, and weighted average shares outstanding between 62.2 million and 62.3 million for fiscal year 2024.
Recent Earnings Snapshots of Some Service Providers
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis.
Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from a year ago.
EFX’s total revenues of $1.32 billion fell short of the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.