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Gartner (IT) Q3 Earnings and Revenues Surpass Estimates

Zacks Equity Research

Gartner, Inc. IT reported solid third-quarter 2019 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of 70 cents beat the consensus mark by 25 cents but decreased 18% on a year-over-year basis.

Revenues of $1.00 billion outpaced the consensus estimate by roughly $13 million and improved 9% year over year on a reported basis and 10% on a foreign currency-neutral basis. Adjusted revenues improved 10% year over year on a reported basis and 11% on a foreign currency-neutral basis.

Total contract value was $3.3 billion, up 11% year over year on a foreign currency-neutral basis.

So far this year, shares of Gartner have gained 14.8% compared with 25.4% rise of the industry it belongs to and 19.9% increase of the Zacks S&P 500 composite.

 

Quarterly Numbers in Detail

Revenues at the Research segment increased 9% year over year on a reported basis and 10% on a foreign currency-neutral basis to $841 million. Gross contribution margin was 69% in the reported quarter.

Revenues at the Conferences segment increased 16% year over year on a reported basis and 19% on a foreign currency-neutral basis to $66 million. Gross contribution margin was 41%.

Revenues at the Consulting segment grew 18% year over year on a reported basis and 20% on a foreign currency-neutral basis to $93 million. Gross contribution margin was 28% in the reported quarter.

Adjusted EBITDA of $140 million declined 6% year over year on a reported basis and 5% on a foreign currency-neutral basis.

Gartner, Inc. Price, Consensus and EPS Surprise

 

Gartner, Inc. Price, Consensus and EPS Surprise

Gartner, Inc. price-consensus-eps-surprise-chart | Gartner, Inc. Quote

Operating cash flow totaled $220 million and free cash flow was $190 million in the reported quarter. Capital expenditures totaled $36 million.

2019 View

Gartner reaffirmed its full-year 2019 guidance. The company now projects revenues in the range of $4.22-$4.26 billion. The current Zacks Consensus Estimate of $4.23 billion lies within the guided range.

Adjusted EPS is anticipated in the range of $3.39-$3.64. The current Zacks Consensus Estimate of $3.51 lies within the guided range.

Adjusted EBITDA is projected in the range of $670-$700 million. Operating cash flow is anticipated between $487 million and $527 million and free cash flow is expected in the range of $400- 430 million.

Zacks Rank & Upcoming Releases

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

Investors interested in the broader Zacks Business Services sector are awaiting third-quarter 2019 earnings of key players like Fiserv FISV, ICF International ICFI and FLEETCOR Technologies FLT, each scheduled to release results on Nov 6.

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