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Broadridge (BR) Q2 Earnings Match, Revenues Beat Estimates

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Zacks Equity Research
·4 min read
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Broadridge Financial Solutions, Inc. BR reported second-quarter fiscal 2021 adjusted earnings of 73 cents per share that improved 38% year over year. Total revenues of $1.06 billion beat the consensus mark by 2.8% and were up 9% year over year. The company generated closed sales of $46 million in the quarter, up 2% year over year.

Revenues by Segment

Revenues in the Investor Communication Solutions segment increased 10% from the year-ago quarter's level to $784 million.

The segment’s recurring fee revenues were up 7% to $394 million. Event-driven fee revenues increased 46% to $45.2 million. Distribution revenues increased 9% to $345 million.

Global Technology and Operations segment's recurring fee revenues came in at $302 million, up 8% year over year. This improvement was driven by acquisitions and organic growth. Higher equity trading volumes benefited the segment’s internal growth.

Operating Results

Adjusted operating income of $119 million improved 26% year over year. Adjusted operating income margin increased to 11.2% from 9.7% in the prior-year quarter.

Broadridge Financial Solutions, Inc. Price, Consensus and EPS Surprise

Broadridge Financial Solutions, Inc. Price, Consensus and EPS Surprise
Broadridge Financial Solutions, Inc. Price, Consensus and EPS Surprise

Broadridge Financial Solutions, Inc. price-consensus-eps-surprise-chart | Broadridge Financial Solutions, Inc. Quote

Balance Sheet and Cash Flow

Broadridge exited the quarter with cash and cash equivalents of $365.6 million compared with the $356.6 million witnessed at the end of the prior quarter. Long-term debt was $1.8 billion, flat with the previous quarter's figure.

The company generated $127.5 million of cash in operating activities and capex was $15.8 million in the quarter. Broadridge paid out $66.3 million in dividends in the reported quarter.

Fiscal 2021 Guidance

Broadridge expects total revenue growth in the range of 1-4% and recurring revenue growth of 3-6%. Adjusted EPS growth is expected to be 6% to 10%. Adjusted operating income margin is estimated to be up by around 18%. Closed sales are anticipated to be between $190 million and $235 million

Broadridge currently 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

Rollins’ ROL fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year-over-year.

IHS Markit’s INFO fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Esimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.

Automatic Data Processing’s ADP second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.

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