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IQVIA (IQV) Beats on Q3 Earnings & Revenues, Ups 2020 View

Zacks Equity Research
·5-min read

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

Adjusted earnings per share of $1.63 beat the consensus mark by 8% and improved 1.9% on a year-over-year basis. The reported figure was above the guided range of $1.47-$1.55.

Total revenues of $2.79 billion outpaced the consensus estimate by 1.3% and increased 0.6% year over year on a reported basis but were down 0.1% on a constant-currency basis. The reported figure came above the guided range of $2.73-$2.78 billion.

So far this year, shares of IQVIA Holdings have gained 6.2% against 1.7% decline of the industry  it belongs to. Meanwhile, the Zacks S&P 500 composite rose 6.5%.

 

Let’s check out the numbers in detail:

Segmental Revenues

Revenues from Technology & Analytics Solutions totaled $1.21 billion, up 10.2% on a reported basis and 9.2% on a constant-currency basis. The segment accounted for 43% of total revenues.

Research & Development Solutions’ revenues of $1.40 billion decreased 4.5% on a reported basis and 5.1% on a constant-currency basis. The segment contributed 50% to total revenues.

Revenues from Contract Sales & Medical Solutions totaled $179 million, down 13.9% on a reported and 14.4% on a constant-currency basis. The segment accounted for 6% of total revenues.

Operating Performance

Adjusted EBITDA was $604 million, up 1.9% year over year. Adjusted EBITDA margin grew to 21.7% from 21.4% in the year-ago quarter.

Operating income was $187 million, down 8.3% from the year-ago quarter. Operating income margin decreased to 6.7% from 7.4% 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 and EPS Surprise

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

Balance Sheet and Cash Flow

IQVIA exited third-quarter 2020 with cash and cash equivalents balance of $1.46 billion compared with $1.11 billion at the end of the prior quarter. Long-term debt was $12.2 billion compared with $11.9 billion at the end of the prior quarter.

The company generated $574 million of cash from operating activities in the reported quarter and CapEx was $157 million.

Share Repurchase

Considering the consistent demand for its offerings, solid liquidity, and strong free cash flow performance, IQVIA reinstated its share-repurchase program, which it had suspended in the wake of the pandemic. As of Sep 30, 2020, the company had nearly $1.0 billion of share-repurchase authorization remaining.

Fourth-Quarter 2020 Guidance

IQVIA expects fourth-quarter revenues in the range of $3.04-$3.19 billion. The current Zacks Consensus Estimate of $3.02 billion lies below the guidance.

Adjusted earnings per share are expected to be between $1.93 and $2.03. The current Zacks Consensus Estimate of $1.95 lies within the guidance.

Adjusted EBITDA is anticipated between $685 million and $710 million.

2020 Guidance

IQVIA raised its full-year guidance.The company now projects adjusted earnings between $6.25 and $6.35 compared with the prior guidance of $6.10 and $6.30 per share. The current Zacks Consensus Estimate of $6.16 lies below the updated guidance.

Revenues are now expected between $11.1-$11.25 billion compared with the prior guidance of $11 billion and $11.1 billion. The current Zacks Consensus Estimate of $11.05 billion lies below the updated guidance.

Adjusted EBITDA is now anticipated between $2,335 million and $2,360 million compared with the prior guided range of $2,295 - $2,345 million.

2021 Guidance

For full-year 2021, IQVIA expects revenues in the range of $12.3-$12.6 billion. The current Zacks Consensus Estimate of $12.18 billion lies below the guidance.

Adjusted earnings per share are expected to be between $7.65 and $7.95. The current Zacks Consensus Estimate of $7.51 lies below the guidance.

Adjusted EBITDA is anticipated between $2.725 billion and $2.800 billion.

Currently, IQVIA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2020 earnings of key players like S&P Global SPGI, Fiserv FISV and Waste Connections WCN. While S&P Global and Fiserv are slated to release their results on Oct 27, Waste Connections is scheduled to release the same on Oct 28.

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