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Genpact (G) Beats on Q3 Earnings, Up 2.4% on Solid EPS View

Genpact Limited G reported better-than-expected third-quarter 2021 results.

The stock climbed 2.4% since the earnings release on Nov 10, as the company’s earnings guidance for 2021 was impressive. Genpact raised the guidance range for adjusted EPS to $2.4-$2.43 from $2.36-$2.39 guided previously. The raised guidance range is above the current Zacks Consensus Estimate of $2.39.

Genpact's quarterly adjusted EPS of 66 cents outpaced the Zacks Consensus Estimate by 15.8% and inched up 18% year over year. Revenues amounted to $1.02 billion, which beat the consensus estimate by 0.4% and increased 9% year over year on a reported basis and 8% on a constant-currency (cc) basis.

Genpact’s shares have gained 26.5% in the past year, underperforming the 31.5% growth of the industry it belongs to.

Genpact Limited Price, Consensus and EPS Surprise

Quarter Details

Global Clients (91% of total revenues) revenues climbed 12% year over year on a reported basis and 11% at cc to $921 million.  The upside was driven by strong growth in Transformation Services.

General Electric revenues of $95 million declined 19% year over year and contributed 9% of total revenues. The downside was mainly due to productivity commitments and macroeconomic impact.  

Adjusted income from operations totaled $169 million, up 6% year over year. Adjusted operating income margin of 16.6% declined 50 basis points (bps) year over year.

Genpact exited the quarter with cash and cash equivalents of $922 million compared with $680 million recorded at the end of the previous quarter. Long-term debt totaled $1.3 billion, flat with the prior quarter figure.

The company generated $210 million of cash from operating activities and capex was $12 million. Genpact returned $20 million to shareholders through dividends in the quarter.

2021 Guidance

Revenues are continued to be anticipated to be between $3.96 to $4 billion, the midpoint ($3.98 billion) of which is below the current Zacks Consensus Estimate of $3.99 billion. Genpact continues to expect Global Clients’ revenue growth to be 10.5%-11.5% on a reported basis and 9%-10% at cc. Adjusted income from operations margin is expected to be approximately at 16.5%,

Cash flow from operations is anticipated to be $550 million, higher than the prior expectation of at least $500 million.

Genpact currently carries a Zacks Rank #3 (Hold).

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

Recent Performance of Some Other Business Services Companies

Some other stocks from the Business Services sector to have reported earnings this season are Equifax EFX, IQVIA Holdings IQV and Omnicom OMC.

Equifax reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.

Equifax currently carries a Zacks Rank #3. The stock gained 69.6% over the past year against 13.7% decline of the industry it belongs to.

IQVIA reported impressive third-quarter 2021 results, with earnings per share of $2.17, beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.

IQVIA carries a Zacks Rank #3. The stock gained 50.5% over the past year against 16.1% decline of the industry it belongs to.

Omnicom reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.

Omnicom also carries a Zacks Rank #3. The stock appreciated 23.8% over the past year, underperforming the 34.9% growth of the industry it belongs to.


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Omnicom Group Inc. (OMC): Free Stock Analysis Report
 
Equifax, Inc. (EFX): Free Stock Analysis Report
 
Genpact Limited (G): Free Stock Analysis Report
 
IQVIA Holdings Inc. (IQV): Free Stock Analysis Report
 
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