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Navigant (NCI) Surpasses Q1 Earnings and Revenue Estimates
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Navigant Consulting, Inc.’s (NCI - Free Report) first-quarter 2019 adjusted earnings per share (from continuing operations) of 18 cents surpassed the Zacks Consensus Estimate by 10 cents and came ahead of the year-ago figure by 15 cents. The bottom line benefited from strong operating performance, higher net interest income, lower depreciation and amortization and lower share count in the current year period.
Total revenues of $202.9 million increased 13.9% from the prior-year quarter. Revenues before reimbursements (RBR) of $186.1 million beat the consensus estimate by $7.2 million and improved 15.3% year over year. The top line benefited from solid growth in managed services business (led by the contribution from the Health System Solutions (HSS) joint venture), continued solid demand in the Energy segment and robust growth in healthcare consulting services. These were, however, partially offset by lower RBR within the Financial Services Advisory and Compliance (FSAC) segment.
Over the past six months, shares of Navigant have gained 7.7% compared with 15.2% rise of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues by Segments
Healthcare segment’s RBR of $119 million increased 32.1% year over year, driven by demand recovery for healthcare consulting services and solid contributions from the HSS joint venture.
Energy segment’s RBR of $36.2 million increased 7.4% year over year on the back of continued solid demand for Energy expertise from both commercial and government clients.
Financial Services Advisory and Compliance’s (“FSAC”) RBR of $30.9 million decreased 17.8% year over year due to slowdown of a large monitorship engagement, expenses arising from some larger banking clients and continued start-up delays on certain new engagements.
EBITDA Performance
Adjusted EBITDA from continuing operations in the first quarter of 2019 came in at $16.3 million compared with $9.2 million in the prior-year quarter. The upside was driven by robust performance of the HSS joint venture, solid year-over-year utilization and margin improvement in healthcare consulting and lower bad debt expense, which were, however, partially offset by lower performance of the FSAC segment.
Navigant Consulting, Inc. Price, Consensus and EPS Surprise
Navigant exited first-quarter 2019 with cash and cash equivalents of $107.22 million compared with $206.92 million at the end of the prior quarter.
The company used $31.1 million of net cash in operating activities in the reported quarter. Adjusted free cash flow was $17.9 million. Capital expenditures were $3 million.
Share Repurchases & Dividend Payment
During first-quarter 2019, Navigant repurchased 2.3 million shares at an aggregate cost of $53.5 million and average price of $23.09 per share. As of Mar 31, 2019, the company had roughly $24.7 million remaining for share repurchases under the board authorization effective May 7, 2018
On Apr 18, 2019, the company’s board of directors extended its existing share repurchase program with an approved limit of $175 million through Dec 31, 2021, effective from May 1, 2019.
The company paid $1.99 million in dividend payments in the reported quarter.
2019 Guidance
Navigant reaffirmed its guidance for 2019. It expects revenues to be $810-$840 million. RBR is expected to be between $735 million and $765 million.
Adjusted earnings per share are expected to be between 85 cents and $1.00. The current Zacks Consensus Estimate of 89 cents lies within the guided range.
Adjusted EBITDA is anticipated to be $70-$80 million. Adjusted free cash flow is anticipated between $43 million and $53 million. Capital expenditure is estimated to be around $20 million.
Investors interested in the broader Zacks Business Services sector are awaiting first-quarter 2019 earnings reports of key players like FLEETCOR Technologies , Gartner (IT - Free Report) and Equifax (EFX - Free Report) . While FLEETCOR and Gartner are slated to report on May 7, Equifax is scheduled to release results on May 10.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Navigant (NCI) Surpasses Q1 Earnings and Revenue Estimates
Navigant Consulting, Inc.’s (NCI - Free Report) first-quarter 2019 adjusted earnings per share (from continuing operations) of 18 cents surpassed the Zacks Consensus Estimate by 10 cents and came ahead of the year-ago figure by 15 cents. The bottom line benefited from strong operating performance, higher net interest income, lower depreciation and amortization and lower share count in the current year period.
Total revenues of $202.9 million increased 13.9% from the prior-year quarter. Revenues before reimbursements (RBR) of $186.1 million beat the consensus estimate by $7.2 million and improved 15.3% year over year. The top line benefited from solid growth in managed services business (led by the contribution from the Health System Solutions (HSS) joint venture), continued solid demand in the Energy segment and robust growth in healthcare consulting services. These were, however, partially offset by lower RBR within the Financial Services Advisory and Compliance (FSAC) segment.
Over the past six months, shares of Navigant have gained 7.7% compared with 15.2% rise of the industry it belongs to.
Let’s check out the numbers in detail.
Revenues by Segments
Healthcare segment’s RBR of $119 million increased 32.1% year over year, driven by demand recovery for healthcare consulting services and solid contributions from the HSS joint venture.
Energy segment’s RBR of $36.2 million increased 7.4% year over year on the back of continued solid demand for Energy expertise from both commercial and government clients.
Financial Services Advisory and Compliance’s (“FSAC”) RBR of $30.9 million decreased 17.8% year over year due to slowdown of a large monitorship engagement, expenses arising from some larger banking clients and continued start-up delays on certain new engagements.
EBITDA Performance
Adjusted EBITDA from continuing operations in the first quarter of 2019 came in at $16.3 million compared with $9.2 million in the prior-year quarter. The upside was driven by robust performance of the HSS joint venture, solid year-over-year utilization and margin improvement in healthcare consulting and lower bad debt expense, which were, however, partially offset by lower performance of the FSAC segment.
Navigant Consulting, Inc. Price, Consensus and EPS Surprise
Navigant Consulting, Inc. Price, Consensus and EPS Surprise | Navigant Consulting, Inc. Quote
Balance Sheet and Cash Flow
Navigant exited first-quarter 2019 with cash and cash equivalents of $107.22 million compared with $206.92 million at the end of the prior quarter.
The company used $31.1 million of net cash in operating activities in the reported quarter. Adjusted free cash flow was $17.9 million. Capital expenditures were $3 million.
Share Repurchases & Dividend Payment
During first-quarter 2019, Navigant repurchased 2.3 million shares at an aggregate cost of $53.5 million and average price of $23.09 per share. As of Mar 31, 2019, the company had roughly $24.7 million remaining for share repurchases under the board authorization effective May 7, 2018
On Apr 18, 2019, the company’s board of directors extended its existing share repurchase program with an approved limit of $175 million through Dec 31, 2021, effective from May 1, 2019.
The company paid $1.99 million in dividend payments in the reported quarter.
2019 Guidance
Navigant reaffirmed its guidance for 2019. It expects revenues to be $810-$840 million. RBR is expected to be between $735 million and $765 million.
Adjusted earnings per share are expected to be between 85 cents and $1.00. The current Zacks Consensus Estimate of 89 cents lies within the guided range.
Adjusted EBITDA is anticipated to be $70-$80 million. Adjusted free cash flow is anticipated between $43 million and $53 million. Capital expenditure is estimated to be around $20 million.
Zacks Rank & Upcoming Releases
Currently, Navigant carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors interested in the broader Zacks Business Services sector are awaiting first-quarter 2019 earnings reports of key players like FLEETCOR Technologies , Gartner (IT - Free Report) and Equifax (EFX - Free Report) . While FLEETCOR and Gartner are slated to report on May 7, Equifax is scheduled to release results on May 10.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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