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ICF International (ICFI) Misses on Q4 Earnings and Revenues

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ICF International, Inc. ICFI reported disappointing fourth-quarter 2019 results, with earnings and revenues lagging the Zacks Consensus Estimate.

Non-GAAP EPS of $1.18 lagged the consensus mark by 4.8% but improved 0.9% on a year-over-year basis. Revenues of $396.6 million missed the consensus mark by 1.4% but increased 4.9% year over year.

Over the past year, shares of the company have gained 2.6% compared with 17.3% growth of the industry it belongs to.

 

Revenues in Detail

Revenues from government clients came in at $244.3 million and improved 7.6% year over year. U.S. federal government revenues of $139.7 million increased 5.5% year over year and contributed 35% to total revenues. U.S. state and local government revenues of $69 million rose 10.9% year over year and contributed 18% to total revenues. International government revenues of $35.6 million, up 10% year over year, contributed 9% to total revenues.

Commercial revenues totaled $152.4 million, up 1% from the year-ago quarter’s figure and contributed 38% to total revenues. Energy markets contributed 39% to commercial revenues and Marketing services contributed 54% to the same.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $2.4 billion and $1.3 billion at the end of the quarter, respectively. The total value of contracts awarded was $353.3 million.

Operational Results

Adjusted EBITDA was $37.4 million, down 5.1% from the year-ago quarter’s figure. Adjusted EBITDA margin of 9.4% was down 100 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 14.9%, down 160 bps year over year.

Balance Sheet

ICF International exited fourth-quarter 2019 with cash and cash equivalent balance of $6.48 million compared with $7.45 million at the end of the previous quarter. The company had a long-term debt of $165.44 million compared with $245 million at the end of the prior quarter.

The company generated $85.1 million of cash from operating activities and capex was $6.2 million.

The company paid out dividends of $2.6 million in the reported quarter. On Feb 27, 2020, the company declared a quarterly dividend of 14 cents per share, payable on Apr 13, 2020 to shareholders of record on Mar 27, 2020.

2020 Outlook

ICF International unveiled its guidance for the year. Management expects total revenues between $1.60 billion and $1.65 billion. The current Zacks Consensus Estimate of $1.59 billion lies below the guidance.

Non-GAAP EPS is expected in the range of $4.00 to $4.30. The current Zacks Consensus Estimate of $4.59 lies above the guidance.

EBITDA is expected to be $145-$155 million. Operating cash flow is anticipated to be around $120 million.

Zacks Rank & Stocks to Consider

Currently, ICF International carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Business Services sector are Interpublic IPG, Omnicom OMC and Genpact G, each carrying a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term expected EPS (three to five years) growth rate for Interpublic, Omnicom and Genpact is 4.5%, 5.6% and 11.9%, respectively.

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