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MAXIMUS (MMS) Q1 Earnings Meet, Revenues Beat Estimates
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MAXIMUS, Inc. (MMS - Free Report) reported first-quarter fiscal 2020 earnings per share of 91 cents, which matched the Zacks Consensus Estimate and increased 5.8% year over year.
Revenues of $818.2 million beat the consensus mark by 1.7% and improved 23.1% year over year. The year-over-year uptick was driven by strength in the U.S. Federal Services Segment due to contribution from the acquired citizen engagement centers business, the ramp-up on the Census contract, and organic growth in the company’s U.S. Health & Human Services and U.S. Federal Services Segments.
Shares of MAXIMUS have gained 4.3% over the past year, compared with 27.8% growth of the industry it belongs to.
Revenues by Segment
U.S. Health and Human Services segment revenues of $312.3 million increased 6.2% year over year mainly driven by new contracts and expansion of existing work. U.S. Federal Services segment revenues of $366.6 million were up 68.9% from the year-ago quarter. Outside the U.S. segment revenues of $139.4 million declined 9% year over year on a reported basis and 8% on a constant-currency basis.
Year to date signed contract awards at Dec 31, 2019 totaled $176.6 million and contracts pending (awarded but unsigned) totaled $439.5 million. The sales pipeline at Dec 31, 2019 was $30.6 billion. This included $3.7 billion in proposals pending, $0.7 billion in proposals in preparation and $26.3 billion in opportunities tracking.
Operating Performance
Operation income of $79.1 million increased 6.7% year over year. Operating margin of 9.7% declined 150 basis points (bps).
Balance Sheet and Cash Flow
The company ended the quarter with cash and cash equivalents balance of $149.5 million compared with $105.6 million in the prior quarter. The company generated $87.3 million of cash from operations and capital expenditure was $10.5 million. Free cash flow was $76.8 million. MAXIMUS paid out dividends of $18 million in the quarter.
Outlook
The company reiterated its fiscal 2020 guidance. Earnings per share are expected to be in the range of $3.95 to $4.15, the midpoint ($4.05) of which is higher than the Zacks Consensus Estimate of $4.01.
The company expects revenues of $3.15-$3.3 billion. The Zacks Consensus Estimate is pegged at $3.23 billion.
Cash flows from operations are expected to be between $300 million and $350 million, and free cash flow is anticipated between $275 million and $325 million. Estimated effective income tax rate is between 24.5% and 25.5%.
Investors interested in the broader Zacks Business Servicessector are awaiting fourth-quarter 2019 earnings of key players like Verisk (VRSK - Free Report) , TransUnion (TRU - Free Report) and Green Dot (GDOT - Free Report) . While Verisk and TransUnion are slated to report their results on Feb 18, Green Dot is scheduled to release on Feb 19.
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MAXIMUS (MMS) Q1 Earnings Meet, Revenues Beat Estimates
MAXIMUS, Inc. (MMS - Free Report) reported first-quarter fiscal 2020 earnings per share of 91 cents, which matched the Zacks Consensus Estimate and increased 5.8% year over year.
Revenues of $818.2 million beat the consensus mark by 1.7% and improved 23.1% year over year. The year-over-year uptick was driven by strength in the U.S. Federal Services Segment due to contribution from the acquired citizen engagement centers business, the ramp-up on the Census contract, and organic growth in the company’s U.S. Health & Human Services and U.S. Federal Services Segments.
Shares of MAXIMUS have gained 4.3% over the past year, compared with 27.8% growth of the industry it belongs to.
Revenues by Segment
U.S. Health and Human Services segment revenues of $312.3 million increased 6.2% year over year mainly driven by new contracts and expansion of existing work. U.S. Federal Services segment revenues of $366.6 million were up 68.9% from the year-ago quarter. Outside the U.S. segment revenues of $139.4 million declined 9% year over year on a reported basis and 8% on a constant-currency basis.
Maximus, Inc. Revenue (TTM)
Maximus, Inc. revenue-ttm | Maximus, Inc. Quote
Sales and Pipeline
Year to date signed contract awards at Dec 31, 2019 totaled $176.6 million and contracts pending (awarded but unsigned) totaled $439.5 million. The sales pipeline at Dec 31, 2019 was $30.6 billion. This included $3.7 billion in proposals pending, $0.7 billion in proposals in preparation and $26.3 billion in opportunities tracking.
Operating Performance
Operation income of $79.1 million increased 6.7% year over year. Operating margin of 9.7% declined 150 basis points (bps).
Balance Sheet and Cash Flow
The company ended the quarter with cash and cash equivalents balance of $149.5 million compared with $105.6 million in the prior quarter. The company generated $87.3 million of cash from operations and capital expenditure was $10.5 million. Free cash flow was $76.8 million. MAXIMUS paid out dividends of $18 million in the quarter.
Outlook
The company reiterated its fiscal 2020 guidance. Earnings per share are expected to be in the range of $3.95 to $4.15, the midpoint ($4.05) of which is higher than the Zacks Consensus Estimate of $4.01.
The company expects revenues of $3.15-$3.3 billion. The Zacks Consensus Estimate is pegged at $3.23 billion.
Cash flows from operations are expected to be between $300 million and $350 million, and free cash flow is anticipated between $275 million and $325 million. Estimated effective income tax rate is between 24.5% and 25.5%.
Zacks Rank & Stocks to Consider
Currently, Maximus 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 Zacks Business Servicessector are awaiting fourth-quarter 2019 earnings of key players like Verisk (VRSK - Free Report) , TransUnion (TRU - Free Report) and Green Dot (GDOT - Free Report) . While Verisk and TransUnion are slated to report their results on Feb 18, Green Dot is scheduled to release on Feb 19.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>