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IQVIA (IQV) Beats Q3 Earnings Estimates, Updates '18 View

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IQVIA Holdings Inc. (IQV - Free Report) reported solid third-quarter 2018 results wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of $1.42 per share exceeded the Zacks Consensus Estimate by 3 cents and increased 19.3% year over year. The bottom line met the higher end of the company’s guided range of $1.35-$1.42.

Total revenues came it at $2.59 billion, which outpaced the consensus mark by $13 million. The top line grew 5.2% on a reported basis and 6.3% on a constant-currency basis. It came above the midpoint of the company’s guided range of $2.55-$2.60 billion.

The better-than-expected results were driven by solid growth in the company’s Research & Development Solutions and Technology & Analytics Solutions segments.

So far this year, shares of IQVIA Holdings have gained 29.6%, significantly outperforming the 1.6% rise of the industry it belongs to and 3.6% gain of the Zacks S&P 500 Composite Index.

 

Let’s check out the numbers in detail

Segmental Revenues

Revenues from Technology & Analytics Solutions (TAS)totaled $1.01 billion, up 12.9% on a reported basis and 15% on a constant-currency basis. The segment benefited from acquisitions. Strategic deals such as the agreement with Roche, which includes the deployment and usage of IQVIA commercial technologies globally, and launch of clinical technologies suite raise optimism about the segment. The segment accounted for 39% of total revenues.

Research & Development Solutions (R&DS)revenues of $1.38 billion increased 3.1% on a reported basis and 3.5% on a constant-currency basis. Substantial organicgrowth was witnessed. The segment contributed 53% to total revenues.

Revenues from Contract Sales & Medical Solutions (CSMS)totaled $198 million, down 12.8% on a reported basis and 11.9% on a constant-currency basis. The segment accounted for 8% of total revenues.

Operating Performance

Adjusted EBITDA was $561 million, up 9.4% on a reported basis and 8.4% on a constant-currency basis.

Operating income was $181 million, down 7.2% from the year-ago quarter. Operating income margin decreased to 6.9% from 7.9% in the year-ago quarter.

Total selling, general and administrative expenses of $429 million were up 8.9% from the year-ago quarter.

IQVIA Holdings Inc. Price, Consensus and EPS Surprise

 

IQVIA Holdings Inc. Price, Consensus and EPS Surprise | IQVIA Holdings Inc. Quote

Balance Sheet and Cash Flow

IQVIA Holdings exited third-quarter 2018 with cash and cash equivalents balance of $827 million compared with $879 million at the end of the prior quarter. Long-term debt at the end of the quarter was $10.5 billion compared with $10.6 billion at the end of the second quarter. The company generated $344 million of cash from operating activities in the reported quarter and spent $123 million on Capex.

IQVIA Holdings repurchased shares worth $133 million during the reported quarter. As of Sep 30, the company had $889 millionavailable under its share repurchase authorization.

2018 Outlook

IQVIA updated its full-year guidance ranges.

Revenues are expected in the range of $10.33-$10.38 billion compared with $10.25-$10.40 billion guided earlier. The updated guidance range has been reaffirmed at the mid-point of the range, despite a foreign currency headwind of approximately $35 million. The Zacks Consensus Estimate of $10.37 billion exceeds the midpoint of the company guided range by 10 million.  

The guidance for adjusted EBITDA has been increased by $10 million at the mid-point of the range. Adjusted EBITDA is now expected in the range of $2.19-$2.22 billion compared with the previous expectation of $2.17-$2.23 billion.

The same for adjusted EPS has been increased by 5 cents at the mid-point of the range.  Adjusted EPS is now expected in the range of $5.45-$5.55 compared with $5.35-$5.55 guided earlier. The Zacks Consensus Estimate of $5.50 is in line with the midpoint of the company guided EPS range.

Zacks Rank & Upcoming Releases

Currently, IQVIA Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Business Services sector are keenly awaiting earnings reports of key players like Automatic Data Processing (ADP - Free Report) , Waste Management (WM - Free Report) and Republic Services (RSG - Free Report) . While Automatic Data Processing will report first-quarter fiscal 2019 results on Oct 31, Waste Management and Republic Services will release third-quarter 2018 results on Oct 25.

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