Broadridge's (BR) Q3 Earnings Surpass Estimates, Up Y/Y

Broadridge Financial Solutions, Inc. BR reported mixed third-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

Adjusted earnings of $1.93 per share beat the consensus estimate by 9% and were up 9.7% year over year. Total revenues of $1.5 billion missed the consensus mark by a slight margin and were up 10.4% year over year.

Recurring fee revenues of $1 billion increased 16% from the year-ago quarter’s level. The company generated closed sales of $58 million in the quarter, up 33% year over year.

Shares of the company have lost 9.9% over the past year, against 11.1% growth of the industry it belongs to.

Let’s check out the numbers in detail.

Revenues by Segment

Revenues in the Investor Communication Solutions segment increased 6% from the year-ago quarter’s level to $1.2 billion. Global Technology and Operations segment revenues came in at $381 million, up 29% from the year-ago quarter’s figure. The improvement was mainly driven by the Itiviti acquisition and new businesses, and was partially offset by a reduction in internal trade growth.

Operating Results

Adjusted operating income of $313 million increased 10% year over year. Adjusted operating income margin stayed flat year over year at 20.4%.

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 $277.2 million compared with $281.2 million at the end of the prior quarter. Long-term debt was $4.2 billion, flat with the prior-quarter tally.

The company generated $80.7 million of cash from operating activities and capex was $10.6 million in the quarter. Broadridge paid out $74.7 million in dividends in the reported quarter.

Fiscal Guidance

Broadridge expects recurring revenue growth at the higher end of 12-15%. Adjusted earnings per share growth is expected to be 13-15%. Adjusted operating income margin is estimated to be up by around 18.5%. Closed sales are anticipated between $240 million and $280 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 Some Other Business Services Companies

Within the broader Business Services sector, ManpowerGroup Inc. MAN,Omnicom Group Inc. OMC and Equifax Inc. EFX recently reported first-quarter 2022 results.

ManpowerGroup’s quarterly results beat earnings and revenue estimates. Adjusted earnings of $1.88 per share beat the consensus mark by 20.5% and improved 69.4% year over year.

MAN’s revenues of $5.14 billion surpassed the consensus mark by 0.7% and inched up 4.5% year over year.

Omnicom reported earnings of $1.39 per share that beat the consensus mark by 8.6% and increased 4.5% year over year.

OMC’s total revenues of $3.4 billion surpassed the consensus estimate by 5.4% but declined slightly year over year.

Equifax's adjusted earnings of $2.22 per share beat the consensus estimate by 3.3% and improved 13% on a year-over-year basis.

EFX’s revenues of $1.36 billion outpaced the consensus estimate by 2.4% and improved 12.4% year over year.

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