Syneos Health Inc. (SYNH - Free Report) reported second-quarter 2019 adjusted earnings per share (EPS) of 74 cents, which beat the Zacks Consensus Estimate by 5.7%. The metric also improved 19.4% from the year-ago tally.
Reported EPS share came in at 11 cents, down 15.4% from the year-ago figure.
Revenues in Detail
Service revenues in the quarter totaled $1.17 billion. The top line increased 8.8% year over year and beat the Zacks Consensus Estimate by 1.7%. Per management, revenue growth across key segments drove the top line.
The Clinical Solutions segment delivered service revenues of $849.9 million in the second quarter, up 8.4% year over year (adjusted revenues up 9.4% at CER). The upside was led by net new business growth,favorable revenue mix and higher growth in reimbursable expenses, partially offset by the adverse impact of foreign currency fluctuation.
Commercial Solutions service revenues came in at $316.9 million in the reported quarter, up 9.8% year over year (adjusted revenues up 10.3% at CER). Net new business growth and the company’s buyout of Kinapse in the third quarter of 2018 drove Commercial Solutions service revenues in the quarter under review.
Direct cost (excluding depreciation and amortization) increased 8.3% to $917.5 million in the quarter. Selling, general and administrative expenses rose 10.6% year over year to $110.9 million. Adjusted operating margin (excluding depreciation, amortization, transaction and integration-related and restructuring and other expenses) expanded 22 basis points from the year-ago quarter to 11.9%.
Syneos Health exited the second quarter of 2019 with cash, cash equivalents, and restricted cash of $107.3 million compared with $107.9 million at the end of the first quarter. Year to date, net cash provided by operating activities was $83.5 million compared with $65.2 million a year ago.
For 2019, the company raised the adjusted service revenue guidance to $4.64-4.75 billion, compared with the earlier projection of $4.62-$4.73 billion. The Zacks Consensus Estimate is pegged at $4.67 billion, within the guided range.
For 2019, the company has also raised its adjusted EPS guidance to the range of $3.08-3.26 from the earlier $3.03-$3.23. The Zacks Consensus Estimate for the same is pegged at $3.12, well within the guided range.
Syneos Health exited the second quarter of 2019 on a solid note. We are upbeat about the strong year-over-year revenue growth across both operating segments. The company has been strengthening its unique end-to-end market position by consistently innovating and expanding its Syneos One product. Strong RFP flow, a diverse portfolio of clinical and commercial initiatives and sustained customer interest in the company’s integrated offerings buoy optimism. Expansion in both margins is impressive as well. The raised 2019 guidance is indicative of continued bullish performance by the company.
Zacks Rank & Other Key Picks
Syneos Health currently carries a Zacks Rank #2 (Buy).
A few other top-ranked companies, which posted solid results this earnings season, are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion beat the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company carries a Zacks Rank of 2.
Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Revenues were $1.1 billion, surpassing the Zacks Consensus Estimate of $1.03 billion. The company has a Zacks Rank #2.
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