Gartner (IT) Surpasses Q1 Earnings and Revenue Estimates

Gartner, Inc. IT first-quarter 2019 adjusted earnings of 58 cents per share surpassed the Zacks Consensus Estimate by 5 cents but decreased 19% on a year-over-year basis. Earnings exceeded the guided adjusted EPS range of 50-54 cents.

Revenues of $970.44 million beat the consensus estimate of $970 million. The top line improved 1% year over year on a reported basis and 4% on a foreign currency-neutral basis. Adjusted revenues improved 8% year over year on a reported basis and 11% on a foreign currency-neutral basis.

Total contract value was $3.1 billion, up 11% year over year on a foreign currency-neutral basis.

So far this year, shares of Gartner have gained 26.4% compared with 24.3% rise of the industry it belongs to and 17% increase of the Zacks S&P 500 composite.

 

Quarterly Numbers in Detail

Revenues at the Research segment increased 8% year over year on a reported basis and 11% on a foreign currency-neutral basis to $825 million. Gross contribution margin was 70% in the reported quarter.

Revenues at the Conferences segment increased 13% year over year on a reported basis and 17% on a foreign currency-neutral basis to $52 million. Gross contribution margin was 36%.

Revenues at the Consulting segment grew 12% year over year on a reported basis and 16% on a foreign currency-neutral basis to $93 million. Gross contribution margin was 31% in the reported quarter.

Gartner, Inc. Price, Consensus and EPS Surprise

 

Gartner, Inc. Price, Consensus and EPS Surprise | Gartner, Inc. Quote

Adjusted EBITDA of $142 million decreased 2% year over year on reported basis and was flat on a foreign currency-neutral basis.

Operating cash flow totaled $36 million and free cash flow was $35 million in the reported quarter. Capital expenditures came in at $20 million.

2019 View

Gartner reaffirmed its full-year 2019 guidance. The company projects revenues in the range of $4.22-$4.32 billion. The current Zacks Consensus Estimate of $4.27 billion lies within the guided range.

Adjusted EPS is anticipated in the range of $3.82-$4.19. The current Zacks Consensus Estimate of $3.97 lies within the guided range.

Adjusted EBITDA is projected in the range of $720-$765 million. Operating cash flow is anticipated between $542 million and $582 million while free cash flow is expected in the range of $455-$485 million.

Zacks Rank & Upcoming Releases

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

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting reports of key players like MAXIMUS MMS, Green Dot GDOT and Equifax EFX. While MAXIMUS is slated to report second-quarter fiscal 2019 results on May 9, Green Dot and Equifax are scheduled to release first-quarter 2019 results on May 8 and May 10, respectively.

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