IQVIA (IQV) Beats on Q1 Earnings, Revenues, Lowers '20 View

IQVIA Holdings Inc. IQV reported solid first-quarter 2020 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of $1.50 beat the consensus mark by 1.4% but decreased 1.9% on a year-over-year basis. The reported figure lies within the guided range of $1.46-$1.51.

Total revenues of $2.75 billion outpaced the consensus estimate by 1.4% and increased 2.6% year over year on a reported basis and 3.7% on a constant-currency basis. The reported figure came above the guided range of $2.71-$2.74 billion.

So far this year, shares of IQVIA Holdings have declined 14.6% compared with 8.8% decline of the industry  it belongs to and 12% decrease of the Zacks S&P 500 composite.

 

Let’s check out the numbers in detail:

Segmental Revenues

Revenues from Technology & Analytics Solutions (TAS) totaled $1.12 billion, up 3.9% on a reported basis and 5.5% on a constant-currency basis. The segment accounted for 41% of total revenues.

Research & Development Solutions (R&DS) revenues of $1.44 billion increased 1.8% on a reported basis and 2.4% on a constant-currency basis. The segment contributed 52% to total revenues.

Revenues from Contract Sales & Medical Solutions (CSMS) totaled $196 million, up 1.6% on a reported and 2.6% on a constant-currency basis. The segment accounted for 7% of total revenues.

IQVIA Holdings Inc. Revenue (TTM)

 

IQVIA Holdings Inc. Revenue (TTM)

IQVIA Holdings Inc. revenue-ttm | IQVIA Holdings Inc. Quote

Operating Performance

Adjusted EBITDA was $562 million, down 4.3% year over year. Adjusted EBITDA margin decreased to 20.4% from 21.9% in the year-ago quarter.

Operating income was $193 million, down 8.8% from the year-ago quarter. Operating income margin decreased to 7% from 7.8% in 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 exited first-quarter 2020 with cash and cash equivalents balance of $927 million compared with $837 million at the end of the prior quarter. Long-term debt at the end of the quarter was $11.9 billion compared with $11.5 billion at the end of the previous quarter.

The company generated $163 million of cash from operating activities in the reported quarter and CapEx was $141 million.

Share Repurchase

During the reported quarter (prior to the coronavirus outbreak turning into a pandemic in March), the company had repurchased shares worth $321 million, including the purchase of one million shares in connection with the February 2020 private resale by certain stockholders.

After the coronavirus was declared a pandemic in March, the company temporarily suspended its share repurchases. As of Mar 31, 2020, the company had nearly $1 billion of share repurchase authorization remaining.

Second-Quarter 2020 Guidance

IQVIA expects the second quarter to be affected the most by the COVID-19 crisis. Revenues are expected between $2.37-$2.44 billion. The current Zacks Consensus Estimate stands at $2.37 billion.

Adjusted earnings per share are expected to be between $1.00 and $1.09. The current Zacks Consensus Estimate of $1.17 lies above the guidance.

Adjusted EBITDA is anticipated between $445 million and $470 million.

2020 Guidance

IQVIA lowered its full-year guidance. The company now projects adjusted earnings between $5.75 and $6.10 compared with the prior guidance of $7.15 and $7.35 per share. The current Zacks Consensus Estimate of $6 lies within the guided range.

Revenues are now expected between $10.6-$10.9 billion compared with the prior guidance of $11.8 billion and $12 billion. The current Zacks Consensus Estimate of $10.82 billion lies within the guided range.

Adjusted EBITDA is now anticipated between $2,200 million and $2,300 million compared with the prior guided range of $2,565 - $2,620 million.

The guidance includes the total estimated impact from general business disruption caused by the COVID-19 virus and around $75 million unfavorable foreign currency impact on revenues.

Currently, IQVIA 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

The Interpublic Group of Companies, Inc. IPG reported first-quarter 2020 adjusted earnings of 11 cents per share, which beat the consensus mark by 22.2% but remained flat on a year-over-year basis.

Equifax Inc. EFX reported first-quarter 2020 adjusted earnings of $1.40 per share, which beat the consensus mark by 8.5% and improved 16% on a year-over-year basis.

ManpowerGroup Inc. MAN reported first-quarter 2020 adjusted earnings of 71 cents per share, which missed the Zacks Consensus Estimate by 2.7% and slumped 48.9% year over year.

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