Broadridge (BR) Beats Q2 Earnings And Revenue Estimates
Zacks Investment Research | Feb 07, 2018 10:33PM ET
Broadridge Financial Solutions Inc. (NYSE:BR) reported better-than-expected second-quarter fiscal 2018 results. Moreover, both revenues and earnings marked solid year-over-year improvement.
The company posted non-GAAP earnings of 79 cents per share (excluding acquisition and amortization related expenses), surpassing the Zacks Consensus Estimate of 58 cents. Also, quarterly earnings increased over twofold on a year-over-year basis.
Quarter Details
Broadridge’s fiscal second-quarter revenues of $1.013 billion increased 13.5% year over year. Moreover, it came ahead of the Zacks Consensus Estimate of $954 million. Better-than-expected revenues “from an elevated level of event-driven activity” were a catalyst.
Recurring fee revenues increased 5% during the quarter that included contribution from organic growth, Net New Business, internal growth and acquisition-related synergies. Event-driven fee revenues soared a whopping 227% to $97 million during the quarter, primarily due to higher proxy contest and mutual fund proxy activities. Distribution revenues during the quarter increased 7%, primarily due to favorable foreign-currency fluctuations.
Revenues from the Investor Communication Solutions segment (78% of total revenues) increased 13.9% from the year-ago quarter to $802.2 million. The improvement was attributable to higher recurring revenues from net new business, closed sales, elevated event-driven fee revenues, internal growth and acquisitions.
Global Technology and Operations segment (22% of total revenues) revenues came in at $228 million, reflecting an increase of 10.1% from the year-ago quarter. The increase was driven by higher Net New Business from closed sales, internal growth and recent acquisition.
Broadridge’s adjusted operating income margin expanded from 9.4% to 13.6%, primarily due to the higher recurring fee revenues and event-driven fee revenues. Selling, general and administrative expenses as a percentage of revenues contracted to 12.6% from 14.1% in the year-ago quarter. The company’s adjusted net income of $94.7 million or 79 cents was up from $46.8 million or 39 cents in the year-ago period.
The company exited the quarter with cash and cash equivalents of $366.5 million compared with $288.8 million in the previous quarter. Long-term debt on the balance sheet totaled $1.223 billion.
The company generated operating cash flow of $141.8 million during the first half of fiscal 2018. Free cash flow came in at $89.3 million in the period.
Broadridge Financial Solutions, Inc. Price and EPS Surprise
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