Earnings Review and Free Research Report: Conduent’s Quarterly Results Met Market Expectations
Research Desk Line-up: SPAR Group Post Earnings Coverage
LONDON, UK / ACCESSWIRE / September 1, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Conduent Inc. (NYSE: CNDT), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=CNDT, following the Company's release of its second quarter 2017 financial results on August 09, 2017. The Company recorded a 25% growth in new business and also reaffirmed its outlook for 2017. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Business Services industry. Pro-TD has currently selected SPAR Group, Inc. (NASDAQ: SGRP) for due-diligence and potential coverage as the Company announced on August 14, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on SPAR Group when we publish it.
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Earnings Reviewed
For Q2 2017, Conduent's revenues totaled $1.50 billion, down 7% compared to revenues of $1.61 billion for Q2 2016. The decline was attributed to lost business, lower volumes with some existing clients, pricing, and strategic decisions. These factors were partially offset by the ramp of new business. Conduent's revenue numbers met analysts' expectations of $1.50 billion.
For Q2 2017, Conduent's gross margin was 16.2%, an improvement of 40 basis points versus the prior year's comparable period; reflecting transformation-driven savings as well as improvements in the other segments. The Company's selling, general, and administrative expenses (SG&A) declined by $17 million to $153 million on a y-o-y basis, also driven by strategic transformations and partially offset by corporate dis-synergies and investments.
During Q2 2017, Conduent's adjusted operating income totaled $88 million, with an adjusted operating margin of 5.9%, compared to $77 million, with an adjusted operating margin of 4.8%, in Q2 2016. The Company's adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) improved 6% to $157 million, with an adjusted EBITDA margin of 10.5%, compared to $148 million, with an adjusted EBITDA margin of 9.2%, in the prior year's same quarter.
For Q2 2017, Conduent recorded net loss of $4 million, or $0.03 per diluted share, compared to net loss of $10 million, or $0.05 per share, in Q2 2016. The Company reported adjusted earnings per share (EPS) of $0.16 compared to $0.30 in Q2 2016, meeting Wall Street's estimates of $0.16.
New Business
During Q2 2017, Conduent's Total Contract Value (TCV) signings were $1.24 billion, down 42% on a y-o-y basis compared to Q2 2016, driven by lower renewal signings primarily as a result of fewer renewal opportunities. The Company's new business TCV was $657 million, up 25% compared to Q2 2016 as a result of key wins and expansion of business with both commercial and public sector clients.
Cash Matters
Conduent generated $67 million in cash flow from operations during Q2 2017 versus $61 million in Q2 2016. This improvement was largely driven by working capital. The Company's cash flow from financing was $19 million, which included the fees associated with the repricing of its Term Loan B in April 2017.
The Company ended the quarter with a cash balance of $309 million on the balance sheet and over $663 million available on its revolver. The Company's free cash flow was $69 million, which includes $33 million in proceeds from the sale of its Dallas site. Even excluding this item, free cash flow improved versus $97 million in the prior year's corresponding period.
Conduent's total debt was $2,130 million as of June 30, 2017. During the reported quarter, the Company did not make any additional drawdown on its revolver and had $70 million outstanding at the end of the quarter.
Headcount was approximately 89,000 as of June 30, 2017, compared to approximately 96,000 as of December 31, 2016.
Outlook
Conduent reiterated its forecasts for revenue to decline between 4.5% and 6.5% for 2017. The Company expects to deliver adjusted EBITDA growth of between 5% and 6%, and estimates that 20% to 30% of adjusted EBITDA will flow through to free cash flow.
Stock Performance
On Thursday, August 31, 2017, the stock closed the trading session at $16.51, slightly down 0.78% from its previous closing price of $16.64. A total volume of 1.34 million shares have exchanged hands. Conduent's stock price advanced 0.12% in the last three months and 3.64% in the past six months. Furthermore, since the start of the year, shares of the Company have rallied 10.81%. At Thursday's closing price, the stock's net capitalization stands at $3.45 billion.
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