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Broadridge (BR) Q4 Earnings and Revenues Beat Estimates

Zacks Equity Research
·3 mins read

Broadridge Financial Solutions, Inc. BR reported strong fourth-quarter fiscal 2020 results beating the Zacks Consensus Estimate on both counts.

Adjusted earnings of $2.15 per share beat the consensus estimate by 2.4% and improved 25% year over year. Total revenues of $1.36 billion beat the consensus mark by 2.7% and were up 12% year over year. The company generated closed sales of $112 million in the quarter, up 55% year over year.

Revenues by Segment

Revenues in the Investor Communication Solutions segment declined 12% from the year-ago quarter level to $1.1 billion.

Global Technology and Operations segment's recurring fee revenues came in at $314 million, up 19% year over year. This improvement was driven by acquisitions and organic growth. Higher trading volumes resulting from market volatility and onboarding of new sales benefited the segment’s internal growth.

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

Operating Results

Adjusted operating income of $335 million improved 25% year over year. Adjusted operating income margin increased to 24.6% from 22.1% in the prior-year quarter.

Balance Sheet and Cash Flow

Broadridge exited the quarter with cash and cash equivalents of $476.6 million compared with the $402.1 million witnessed at the end of the prior quarter. Long-term debt was $1.4 billion compared with the $1.7 billion recorded at the end of the previous quarter.

The company generated $442.6 million of cash in operating activities and capex was $14.2 million in the quarter. Broadridge paid out $62 million in dividends in the reported quarter.

Fiscal 2021 Guidance

Broadridge expects revenue growth in the range of 0-4%. It anticipates recurring revenue growth of 2-6%. Adjusted EPS growth is expected to be 4% to 10%. Adjusted operating income margin is estimated to be up by around 100 basis points. Closed sales are anticipated to be between $190 million and $235 million.

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

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis.

IQVIA Holdings IQV reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis.

Robert Half RHI reported second-quarter 2020 earnings of 41 cents per share beat the consensus mark by 17% but were down 58% year over year.

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