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Genpact (G) Beats Q1 Earnings Estimate Amid Coronavirus Crisis

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Genpact Limited (G - Free Report) delivered impressive first-quarter 2020 results, with earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings per share of 53 cents outpaced the consensus mark by 15.2% and increased 23% year over year. This upside was driven by higher operating income of 6 cents and a positive impact of 7 cents related to higher foreign-exchange balance-sheet remeasurement gains, partially offset by negative impact of a penny each from higher effective tax rate and increased share count.

Revenues amounted to $923 million, which beat the consensus estimate by 3.9% and improved 14% year over year on a reported as well as constant-currency basis. The top line was aided by strength across all industry verticals.

The company started witnessing impacts of the coronavirus outbreak from the second week of March and lost around $7 million of revenues in the first quarter. The stock has declined 8.1% over the past year compared with the 19.8% decline of the industry it belongs to.

Quarter Details

Global Clients (87% of total revenues) revenues climbed 14% year over year on a reported basis and 15% on a constant currency basis to $802 million. General Electric (GE) revenues of $122 million increased 12% year over year and contributed 13% to total revenues.

Adjusted income from operations totaled $136 million, up 12% year over year. Adjusted operating income margin of 14.7% shrunk 30 basis points (bps) year over year.

Genpact exited the first quarter with cash and cash equivalents of $401.6 million compared with the $467.1 million recorded at the end of the previous quarter. Long-term debt (less current portion) totaled $1.3 billion, more or less flat with the prior quarter.

The company used $18.6 million of cash in operating activities and capex was $14.1 million.

Genpact returned $18.5 million to shareholders through dividend payout and $45 million through share repurchase in the March-end quarter.


Considering impacts of the pandemic, Genpact expects revenues to decline 4-6% year over year on a reported basis and 3-5% on a constant currency basis in the second quarter. It has withdrawn the full-year 2020 guidance.

Genpact currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank 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, at present.

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. Currently, the stock carries a Zacks Rank #3.

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