We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Genpact (G) Up 8% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Genpact (G - Free Report) . Shares have added about 8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Genpact due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Genpact Surpasses Q1 Earnings & Revenue Estimate
Genpact 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% over the past year compared with the 16% 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.
Guidance
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -28% due to these changes.
VGM Scores
At this time, Genpact has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Genpact has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Genpact (G) Up 8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Genpact (G - Free Report) . Shares have added about 8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Genpact due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Genpact Surpasses Q1 Earnings & Revenue Estimate
Genpact 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% over the past year compared with the 16% 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.
Guidance
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -28% due to these changes.
VGM Scores
At this time, Genpact has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Genpact has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.