Gartner (IT) Surpasses Q4 Earnings and Revenue Estimates
Gartner, Inc. IT reported better-than-expected fourth-quarter 2020 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of $1.59 beat the consensus mark by 93.9% and increased 35% year over year. Revenues of $1.11 billion beat the consensus estimate by 3.8% but declined 8% year over year on a reported basis and 9% on a foreign currency-neutral basis.
Total contract value was $3.6 billion, up 4% year over year on a foreign currency-neutral basis.
Over the past year, shares of Gartner have gained 22.8% outperforming the 20.5% growth of the industry it belongs to and 19% increase of the Zacks S&P 500 composite.
Quarterly Numbers in Detail
Revenues at the Research segment increased 5% year over year on a reported basis and 4% on a foreign currency-neutral basis to $926 million. Gross contribution margin was 72% in the reported quarter.
Revenues at the Conferences segment declined 57% year over year on a reported basis and 58% on a foreign currency-neutral basis to $93 million. Gross contribution margin was 78% in the reported quarter.
Revenues at the Consulting segment declined 10% year over year on a reported basis and 12% on a foreign currency-neutral basis to $94 million. Gross contribution margin was 26% in the reported quarter.
Adjusted EBITDA of $245 million improved 13% year over year on a reported basis and 10% on a foreign currency-neutral basis.
Operating cash flow totaled $260 million and free cash flow was $237 million in the reported quarter. Capital expenditures totaled $23 million.
The company repurchased 0.6 million common shares for $100 million during the reported quarter. Further, its board of directors raised the share repurchase authorization by $300 million.
2021 View
Gartner unveiled its full-year 2021 guidance. The company expects total revenues to be $4.37 billion. The current Zacks Consensus Estimate of $4.45 billion is above the updated guidance.
Adjusted EPS is anticipated to be $4.10. The current Zacks Consensus Estimate of $4.03 is below the guidance.
Adjusted EBITDA is projected to be $760 million. Free cash flow is anticipated to be $630 million.
Currently, Gartner 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
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 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate 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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