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Gartner (IT) Beats Q2 Earnings Estimates, Raises 2020 View

Gartner, Inc.IT reported better-than-expected second-quarter 2020 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of $1.20 beat the consensus mark by 51.9% but decreased 17.2% year over year. Revenues of $973.1 million beat the consensus estimate by 3.5% but declined 9.1% year over year on a reported basis and 7.6% on a foreign currency-neutral basis.

Total contract value was $3.4 billion, up 7% year over year on a foreign currency-neutral basis.

So far this year, shares of Gartner have lost 18.5% against 6.4% growth of the industry it belongs to and 2.3% increase of the Zacks S&P 500 composite.

Quarterly Numbers in Detail

Revenues at the Research segment increased 6% year over year on a reported basis and 7.8% on a foreign currency-neutral basis to $875 million. Gross contribution margin was 72.3% in the reported quarter.

Revenues at the Consulting segment declined 5.9% year over year on a reported basis and 5.1% on a foreign currency-neutral basis to $97 million. Gross contribution margin was 34.4% in the reported quarter.

Adjusted EBITDA of $192 million improved 4% year over year on a reported basis and 6% on a foreign currency-neutral basis.

Operating cash flow totaled $343 million and free cash flow was $322 million in the reported quarter. Capital expenditures totaled $21 million.

2020 View

Gartner raised its full-year 2020 guidance. The company now expects total revenues to be $3.88 billion compared with the prior guidance of $3.81 billion. The current Zacks Consensus Estimate of $3.83 billion is below the updated guidance.

Adjusted EPS is anticipated to be $3.08 compared with the prior guidance of $3.00. The current Zacks Consensus Estimate of $3.07 is below the updated guidance.

Adjusted EBITDA is projected to be $635 million compared with the prior guidance of $625 million. Free cash flow is anticipated to be $425 million compared with the prior guidance of $300 million.

Currently, Gartner carries a Zacks Rank #4 (Sell).

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

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.

IQVIA Holdings IQV reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.

Robert Half RHI reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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