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IQVIA Holdings (IQV) Beats on Q2 Earnings, Updates '19 View

Zacks Equity Research

IQVIA Holdings Inc. IQV reported solid second-quarter 2019 results wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of $1.53 beat the consensus mark by 4 cents and increased 18.6% on a year-over-year basis. The reported figure exceeded the guided range of $1.46-$1.51.

Total revenues of $2.74 billion outpaced the consensus estimate by $46.9 million and increased 6.7% year over year on a reported basis and 8.5% on a constant-currency basis. The reported figure exceeded the guided range of $2.66 billion- $2.71 billion.

So far this year, shares of IQVIA Holdings have gained 35%, outperforming the 21.7% rise of the industry it belongs to and 18.3% increase of the Zacks S&P 500 composite.

 

Let’s check out the numbers in detail

Segmental Revenues

Revenues from Technology & Analytics Solutions (TAS) totaled $1.10 billion, up 9% on a reported basis and 11.4% on a constant-currency basis. The segment accounted for 40% of total revenues.

Research & Development Solutions (R&DS) revenues of $1.44 billion increased 6.3% on a reported basis and 7.5% on a constant-currency basis. The segment contributed 52% to total revenues.

Revenues from Contract Sales & Medical Solutions (CSMS) totaled $203 million, down 1.5% on a reported basis but up 1% on a constant-currency basis. The segment accounted for 7% of total revenues.

Operating Performance

Adjusted EBITDA was $578 million, up 8.4% on a reported basis. Adjusted EBITDA margin increased to 21.1% from 20.8% in the year-ago quarter

Operating income was $197 million, up 15.9% from the year-ago quarter. Operating income margin increased to 7.2% from 6.6% in the year-ago quarter.

Total selling, general and administrative expenses of $436 million were up 2.8% from the year-ago quarter.

IQVIA Holdings Inc. Price, Consensus and EPS Surprise

 

IQVIA Holdings Inc. Price, Consensus and EPS Surprise

IQVIA Holdings Inc. price-consensus-eps-surprise-chart | IQVIA Holdings Inc. Quote

Balance Sheet and Cash Flow

IQVIA Holdings exited second-quarter 2019 with cash and cash equivalents balance of $938 million compared with $936 million at the end of the prior quarter. Long-term debt at the end of the quarter was $11.3 billion compared with $11.2 billion at the end of the first-quarter 2019.

The company generated $391 million of cash from operating activities in the reported quarter and spent $155 million on capex.

IQVIA Holdings repurchased shares worth $236 million during the reported quarter. As of Jun 30, 2019, the company had roughly $1.9 billion of share repurchase authorization remaining.

Q3 Guidance

For third-quarter 2019, IQVIA projects adjusted earnings per share in the range of $1.53-$1.59. The current Zacks Consensus Estimate of $1.60 is above the guided range.

Revenues are expected between $2.73 billion and $2.78 billion. The current Zacks Consensus Estimate of $2.75 billion falls within the guided range.

Adjusted EBITDA is anticipated in the range of $580-$595 million.

2019 Guidance

IQVIA Holdings updated its guidance for full-year 2019.

For the full year, the company now projects adjusted earnings between $6.25 per share and $6.45 per share compared with the previously guided range of $6.20-$6.40. The current Zacks Consensus Estimate of $6.34 lies within the guided range.

Revenues are now expected to be between $11.00 billion and $11.15 billion compared with the previously guided range of $10.9 billion and $11.13 billion. The current Zacks Consensus Estimate of $11.01 billionlies within the guided range.

Adjusted EBITDA is now anticipated in the range of $2,385 - $2,415 million compared with the previously guided range of $2,375-$2,425 million.

Zacks Rank & Upcoming Releases

Currently, IQVIA Holdings carries a Zacks Rank #3 (Hold). 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 second-quarter 2019 earnings of key players like Insperity NSP, Waste Connections WCN and Verisk Analytics VRSK. While Insperity and Waste Connections are slated to report on Jul 29, Verisk Analytics is scheduled to release results on Jul 30.

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