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IQVIA (IQV) Surpasses Q3 Earnings and Revenue Estimates

Zacks Equity Research

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

Adjusted earnings per share of $1.60 beat the consensus mark by 3 cents and increased 12.7% on a year-over-year basis. The reported figure exceeded the guided range of $1.53-$1.59.

Total revenues of $2.77 billion outpaced the consensus estimate by $5 million and increased 6.7% year over year on a reported basis and 7.9% on a constant-currency basis. The reported figure came within the guided range of $2.73 billion-$2.78 billion.

So far this year, shares of IQVIA have gained 29.2%, outperforming the 10.9% rally of the industry it belongs to.

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Let’s check out the numbers in detail

Segmental Revenues

Revenues from Technology & Analytics Solutions (TAS) totaled $1.10 billion, up 8% on a reported basis and 10% on a constant-currency basis. The segment accounted for 40% of total revenues.

Research & Development Solutions (R&DS) revenues of $1.47 billion increased 6.1% on a reported basis and 6.8% on a constant-currency basis. The segment contributed 53% to total revenues.

Revenues from Contract Sales & Medical Solutions (CSMS) totaled $208 million, up 5.1% on a reported as well as constant-currency basis. The segment accounted for 7% of total revenues.

Operating Performance

Adjusted EBITDA was $593 million, up 5.7% year over year. Adjusted EBITDA margin declined to 21.4% from 21.6% in the year-ago quarter.

Operating income was $204 million, up 12.7% from the year-ago quarter. Operating income margin increased to 7.4% from 7% in the year-ago quarter.

Total selling, general and administrative expenses of $395 million were down 7.9% from the year-ago quarter.

Balance Sheet and Cash Flow

IQVIA exited the quarter with cash and cash equivalents balance of $863 million compared with $938 million at the end of the prior quarter. Long-term debt at the end of the quarter was $11.4 billion compared with $11.3 billion at the end of the previous quarter.

The company generated $330 million of cash from operating activities in the reported quarter and CapEx was $149 million. IQVIA repurchased shares worth $313 million during the quarter.

Q4 Guidance

For fourth-quarter 2019, IQVIA projects adjusted earnings per share in the range of $1.65-$1.75. The current Zacks Consensus Estimate is pegged at $1.75.

Revenues are expected between $2.807 billion and $2.857 billion. The current Zacks Consensus Estimate stands at $2.89 billion.

Adjusted EBITDA is anticipated in the range of $635-$649 million.

2019 Guidance

IQVIA updated its guidance for full-year 2019.

The company now projects adjusted earnings between $6.30 and $6.40 per share compared with the previously guided range of $6.25-$6.45. The current Zacks Consensus Estimate of $6.39 lies within the guided range.

Revenues are now expected between $11 billion and $11.05 billion compared with the previously guided range of $11-$11.15 billion. The current Zacks Consensus Estimate of $11.08 billion lies above the guided range.

Adjusted EBITDA is now anticipated in the range of $2,393 - $2,407 million compared with the previously guided range of $2,385 - $2,415 million.

Zacks Rank & Other Stocks to Consider

Currently, IQVIA carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader Zacks Business Services sector are FleetCor FLT, S&P Global SPGI and Paychex PAYX, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings (three to five years) growth rate for FleetCor, S&P Global and Paychex is estimated at 15.6%, 10% and 7%, respectively.

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