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Broadridge (BR) Q4 Earnings Meet Estimates, Revenues Lag

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Broadridge Financial Solutions, Inc.’s (BR - Free Report) fourth-quarter fiscal 2019 earnings came in line with the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings came in at $1.72 cents per share, down 8% year over year. Total revenues of $1.21 billion lagged the consensus mark by $13 million and were down 8% year over year.

Shares of the company have gained 32.1% year to date, outperforming the 28.8% rally of the industry it belongs to.

Let’s check out the numbers in detail.

Revenues by Segment

Revenues in the Investor Communication Solutions segment declined 11% from the year-ago quarter’s level to $990 million. Global Technology and Operations segment revenues came in at $253 million, up 8% from the year-ago quarter’s figure. The improvement was driven by acquisitions, internal growth and higher net new business from closed sales.

Revenues by Type

Recurring fee revenues of $813 million declined 6% from the year-ago quarter’s level. Event-driven fee revenues of $51 million decreased 16% year over year, mainly due to lower mutual fund proxy activity. Distribution revenues were down 11% year over year to $378 million, due to lower transactional print volumes, decline in Event-driven fee activity, and the impact of the ASC 606 revenue accounting change.

Operating Results

Adjusted operating income of $267 million declined 8% year over year due to decrease in recurring fee revenues. Adjusted operating income margin increased to 22.1% from 22% in the prior-year quarter.

Balance Sheet and Cash Flow

Broadridge exited the fiscal fourth quarter with cash and cash equivalents of $273.2 million compared with $292.1 million at the end of the prior quarter. Long-term debt was $1.47 billion compared with $1.17 billion at the end of the prior quarter.

The company generated $399.1 million of cash from operating activities and capex was $19.7 million in the quarter. Non-GAAP free cash flow was $372.8 million. Broadridge paid out $56.1 million in dividends in the reported quarter.

Fiscal 2020 Guidance

Total revenues are expected to grow 3%-6%. Recurring fee revenue growth is anticipated in the range of 8-10%. Adjusted operating income margin is estimated to be approximately 18%. Closed sales are anticipated to be between $190 million and $230 million. Adjusted EPS are expected to register 8-12% growth.

Zacks Rank & Upcoming Releases

Currently, Broadridge 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 second-quarter 2019 earnings of key players like Genpact (G - Free Report) , Green Dot (GDOT - Free Report) and Navigant Consulting . While Genpact and Green Dot are slated to report on Aug 7, Navigant Consulting is scheduled to release results on Aug 8.

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