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ICF International (ICFI) Beats on Q1 Earnings and Revenues
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ICF International, Inc. (ICFI - Free Report) reported impressive first-quarter 2020 numbers, with both earnings and revenues beating the Zacks Consensus Estimate.
Non-GAAP EPS of 83 cents surpassed the consensus mark by 9.2% but declined 4.6% on a year-over-year basis. Revenues of $358.2 million marginally beat the consensus mark and increased 5% year over year.
Despite the better-than-expected results, the stock declined 11.9% from the day of reporting (May 5), as the EPS guidance for 2020 was dismal. The company lowered the range from the $4- $4.3 guided earlier to $3.5-3.8. Further, the mid-point ($3.65) of the revised range is below the current Zacks Consensus Estimate of $3.74.
Over the past year, ICF’s shares have depreciated 15.7%, as against 10.5% growth of the industry it belongs to.
The company stated that the coronavirus pandemic did not have a significant impact on its quarterly performance. Notably, it has business-continuity plans in place and shifted more than 98% of its employees to work from home.
Revenues in Detail
Revenues from government clients came in at $239.8 million and improved 6.5% year over year. The U.S. federal government revenues of $155.4 million increased 17.6% year over year and contributed 44% to total revenues. The U.S. state and local government revenues of $61.3 million decreased 7% year over year and contributed 17% to total revenues. International government revenues of $23.1 million were down 14.8% year over year, contributing 6% to total revenues.
Commercial revenues totaled $118.4 million, up 2% from the year-ago quarter’s figure and contributed 33% to total revenues. Energy markets and marketing services contributed 47% and 43%, respectively, to commercial revenues.
Backlog and Value of Contracts
Total backlog and funded backlog amounted to $2.7 billion and $1.3 billion at the end of the first quarter, respectively. The total value of contracts awarded in the quarter came in at $356.9 million, up 23.4%.
Operational Results
Adjusted EBITDA was $28 million, down 1.8% from the year-ago quarter’s figure. Adjusted EBITDA margin of 7.8% shrunk 50 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 8.3%, down 90 bps year over year.
Balance Sheet
ICF exited the March-end quarter with cash and cash equivalent balance of $58.7 million compared with the $6.5 million recorded at the end of the previous quarter. The company had a long-term debt of $507 million compared with the $164.3 million witnessed at the end of the prior quarter.
The company used $15.2 million of cash from operating activities, and capex was $4.7 million. ICF paid out dividends of $2.6 million in the reported quarter.
2020 Guidance
Management lowered its revenue expectation to $1.45-$1.51 billion from the $1.6-$1.65 billion anticipated previously. The current Zacks Consensus Estimate of $1.47 billion lies below the mid-point ($1.48) of the revised guidance.
EBITDA is expected to be $126-$136 million compared with the prior estimate of $145-$155 million. Operating cash flow is anticipated to be around $110 million compared with the previous expectation of $120 million.
S&P Global Inc. (SPGI - Free Report) reported first-quarter 2020 adjusted earnings per share of $2.73, which beat the consensus mark by 15.7% and improved 29.4% year over year on revenue growth, benefits of productivity initiatives and reduced business travel. The stock carries a Zacks Rank #3 currently.
IQVIA Holdings Inc. (IQV - Free Report) delivered first-quarter 2020 adjusted earnings per share of $1.50, which outpaced the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure was within the guided range of $1.46-$1.51. The stock currently carries a Zacks Rank of 3.
Insperity, Inc. (NSP - Free Report) came up with first-quarter 2020 adjusted earnings of $1.70 per share, which surpassed the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher-end of the guided range of $1.61-$1.70. The stock currently carries a Zacks Rank #3.
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ICF International (ICFI) Beats on Q1 Earnings and Revenues
ICF International, Inc. (ICFI - Free Report) reported impressive first-quarter 2020 numbers, with both earnings and revenues beating the Zacks Consensus Estimate.
Non-GAAP EPS of 83 cents surpassed the consensus mark by 9.2% but declined 4.6% on a year-over-year basis. Revenues of $358.2 million marginally beat the consensus mark and increased 5% year over year.
Despite the better-than-expected results, the stock declined 11.9% from the day of reporting (May 5), as the EPS guidance for 2020 was dismal. The company lowered the range from the $4- $4.3 guided earlier to $3.5-3.8. Further, the mid-point ($3.65) of the revised range is below the current Zacks Consensus Estimate of $3.74.
Over the past year, ICF’s shares have depreciated 15.7%, as against 10.5% growth of the industry it belongs to.
The company stated that the coronavirus pandemic did not have a significant impact on its quarterly performance. Notably, it has business-continuity plans in place and shifted more than 98% of its employees to work from home.
Revenues in Detail
Revenues from government clients came in at $239.8 million and improved 6.5% year over year. The U.S. federal government revenues of $155.4 million increased 17.6% year over year and contributed 44% to total revenues. The U.S. state and local government revenues of $61.3 million decreased 7% year over year and contributed 17% to total revenues. International government revenues of $23.1 million were down 14.8% year over year, contributing 6% to total revenues.
Commercial revenues totaled $118.4 million, up 2% from the year-ago quarter’s figure and contributed 33% to total revenues. Energy markets and marketing services contributed 47% and 43%, respectively, to commercial revenues.
Backlog and Value of Contracts
Total backlog and funded backlog amounted to $2.7 billion and $1.3 billion at the end of the first quarter, respectively. The total value of contracts awarded in the quarter came in at $356.9 million, up 23.4%.
Operational Results
Adjusted EBITDA was $28 million, down 1.8% from the year-ago quarter’s figure. Adjusted EBITDA margin of 7.8% shrunk 50 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 8.3%, down 90 bps year over year.
Balance Sheet
ICF exited the March-end quarter with cash and cash equivalent balance of $58.7 million compared with the $6.5 million recorded at the end of the previous quarter. The company had a long-term debt of $507 million compared with the $164.3 million witnessed at the end of the prior quarter.
The company used $15.2 million of cash from operating activities, and capex was $4.7 million. ICF paid out dividends of $2.6 million in the reported quarter.
2020 Guidance
Management lowered its revenue expectation to $1.45-$1.51 billion from the $1.6-$1.65 billion anticipated previously. The current Zacks Consensus Estimate of $1.47 billion lies below the mid-point ($1.48) of the revised guidance.
EBITDA is expected to be $126-$136 million compared with the prior estimate of $145-$155 million. Operating cash flow is anticipated to be around $110 million compared with the previous expectation of $120 million.
ICF currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
S&P Global Inc. (SPGI - Free Report) reported first-quarter 2020 adjusted earnings per share of $2.73, which beat the consensus mark by 15.7% and improved 29.4% year over year on revenue growth, benefits of productivity initiatives and reduced business travel. The stock carries a Zacks Rank #3 currently.
IQVIA Holdings Inc. (IQV - Free Report) delivered first-quarter 2020 adjusted earnings per share of $1.50, which outpaced the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure was within the guided range of $1.46-$1.51. The stock currently carries a Zacks Rank of 3.
Insperity, Inc. (NSP - Free Report) came up with first-quarter 2020 adjusted earnings of $1.70 per share, which surpassed the consensus mark by 5.6% but decreased 14.1% year over year. The reported figure matched the higher-end of the guided range of $1.61-$1.70. The stock currently carries a Zacks Rank #3.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
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