Post Earnings Coverage as Broadridge Financial Solutions' Q3 Top-line Surged 46% Y-o-Y on NACC Acquisition
Upcoming AWS Coverage on Leidos Holdings Post-Earnings Results
LONDON, UK / ACCESSWIRE / May 30, 2017 / Active Wall St. announces its post-earnings coverage on Broadridge Financial Solutions, Inc. (NYSE: BR). The Company released its financial results for the third quarter fiscal 2017 (Q3 FY17) on May 10, 2017. The Lake Success, New York-based Company's total revenues and adjusted diluted EPS rose 46% and 19% y-o-y, respectively, beating market consensus estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Broadridge Financial Solutions' competitors within the Information & Delivery Services space, Leidos Holdings, Inc. (NYSE: LDOS), reported on May 04, 2017, financial results for the Q1 FY17. AWS will be initiating a research report on Leidos Holdings in the coming days.
Today, AWS is promoting its earnings coverage on BR; touching on LDOS. Get our free coverage by signing up to:
http://www.activewallst.com/register/.
Earnings Reviewed
During the quarter ended on March 31, 2017, Broadridge Financial reported total revenues of $1.01 billion compared to $688.8 million recorded at the end of Q3 FY16. Total revenues numbers for Q3 FY17 topped market consensus estimates of $994 million. The surge in quarterly revenues is primarily attributed to acquisition of North American Customer Communications (NACC) acquired from DST Systems Inc. (NYSE:DST), which contributed a $283.1 million in the Company's total revenues. Furthermore, recurring revenues for Q3 FY17 was $592 million, rising 30% from $455 million in Q3 FY16.
The technology outsourcing Company reported GAAP net earnings of $75.9 million, or $0.63 per diluted share, in Q3 FY17 compared to net income attributable to stockholders of $63.7 million, or $0.52 per diluted share, in Q3 FY16. The Company's adjusted net earnings increased to $83.3 million, or $0.69 per diluted share, in Q3 FY17 from $70.0 million, or $0.58 per diluted share, in Q3 FY16. Wall Street had expected the Company to report adjusted net earnings of $0.59 per diluted share.
Operational Metrics
In the reported quarter, Broadridge Financial spent $899.2 million as operating expenses compared to $588.2 million in Q3 FY16. The Company's GAAP operating income for Q3 FY17 stood at $109.7 million, or 10.9% of total revenues, compared to $100.6 million, or 14.6% of total revenues in Q3 FY16. Additionally, the Company reported adjusted operating income of $133.6 million, or 13.2% of total revenues in Q3 FY17 versus $109.8 million, or 15.9% of total revenues, in the last year's comparable quarter.
Segment-Wise
Broadridge Financial's Investor Communication Solutions (ICS) segment reported revenues of $826.4 million in Q3 FY17, surging 60% from $515.4 million in Q3 FY16. The segment's recurring fee revenues also rose $126 million, or 48% y-o-y, to $389 million in Q3 FY17. Furthermore, the segment's earnings before income taxes came in at $73.9 million in Q3 FY17, up 10% from $67.1 million in the previous year's corresponding quarter.
Global Technology and Operations (GTO) segment's revenues grew 6% to $202.7 million in Q3 FY17 from $191.3 million in the last year's comparable quarter. Moreover, the segment reported earnings before income taxes of $44.3 million in Q3 FY17, rising 10% from $40.2 million in the prior year's same quarter.
Cash Flow & Balance Sheet
During the three quarters ended March 31, 2017, the Company generated $162.1 million as net cash from its operating activities compared to $161.1 million in the prior year's comparable period. Furthermore, the Company's reported non-GAAP free cash flow of $92.6 million in nine months ended March 31, 2017, compared to $105.0 million in the last year's same period.
At the close of books on March 31, 2017, Broadridge Financial had $269.5 million in cash and cash equivalents compared to $727.7 million at the close of books on June 30, 2016. The Company's long-term debt increased to $1.14 billion as on March 31, 2017, from $890.7 million as on June 30, 2016.
Outlook
The Company reaffirmed earnings guidance for full year FY17. Broadridge Financials management expects recurring fee revenue growth in the range of 29% to 31% with total revenue growth range of 40% to 42%. Adjusted operating margin for FY17 is forecasted to be 15% approximately. For FY17, adjusted diluted EPS is anticipated to grow between 12% and 17%. Additionally, free cash flow for full year FY17 is projected to be in the range of $350 million and $400 million.
Stock Performance
Broadridge Financial Solutions' share price finished last Friday's trading session at $75.16, marginally sliding 0.82%. A total volume of 424.24 thousand shares exchanged hands. The stock has surged 14.05% and 16.56% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 13.36%. The stock is trading at a PE ratio of 29.36 and has a dividend yield of 1.76%.
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