ICON plc ICLR delivered second-quarter 2024 adjusted earnings per share of $3.75, up 20.6% from the year-ago period’s figure. The metric also outpaced the Zacks Consensus Estimate by 1.7%.
Q2 Revenues
Total revenues rose 4.9% year over year to $2.12 billion, up 5.3% at constant exchange rate or CER. The metric missed the Zacks Consensus Estimate by a marginal 0.6%.
Gross business wins in the second quarter amounted to $3.07 billion and cancellations totaled $493 million. This resulted in net business wins of $2.58 billion and a book-to-bill of 1.22.
Margins
The gross profit in the second quarter increased 6.1% year over year to $6.27 billion. The gross margin expanded 31-basis points (bps) to 29.6%.
During the quarter, Selling, general and administrative expenses rose 3.5% to $194.5 million.
The adjusted operating income was $4.32 billion, suggesting an increase of 7.2% year over year. The adjusted operating margin expanded 44 bps to 20.4%.
Cash Position
ICON exited the second quarter with cash and cash equivalents of $506.6 million compared with $396.1 million at the end of the first quarter. It had a net debt balance of $2.9 billion at the end of the reported quarter.
Cumulative cash flow provided by operating activities was $545.7 million compared with $379.4 million in the prior-year period.
Guidance
The company updated its full-year 2024 guidance.
The company now expects revenues to be in the range of $8.45-$8.55 billion (up from the previous guidance of $8.48-$8.72 billion), representing growth of approximately 5% year over year at the midpoint of the range. The Zacks Consensus Estimate for the same is pegged at $8.62 billion.
ICON PLC Price, Consensus and EPS Surprise
ICON PLC price-consensus-eps-surprise-chart | ICON PLC Quote
Adjusted earnings per share are anticipated to be in the range of $15.00-$15.20 (up from the previous guidance of $14.65-$15.15), implying 17.3-18.8% year-over-year growth. The Zacks Consensus Estimate for the metric is pegged at $15.09.
Our Take
ICON exited the second quarter of 2024 on a mixed note, wherein earnings beat estimates but revenues lagged the same. The company’s performance in the reported quarter reflects its efficient service delivery and strong cost management. Its strong performance is reflective of the current favorable demand trends across the industry and the further development of strategic customer partnerships.
The expansion of both margins is encouraging. The raised 2024 guidance instills optimism among investors. However, foreign exchange and COVID-specific state delays continue to negatively impact the company’s performance.
Zacks Rank and Other Key Picks
ICON currently carries a Zacks Rank #2 (Hold).
A few other top-ranked stocks from the broader medical space are Intuitive Surgical ISRG, Abbott Laboratories, Inc. ABT, and Haemonetics HAE.
Intuitive Surgical reported a second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has a long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
Abbott, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2024 earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company beat on earnings in each of the trailing four quarters, the average surprise being 2.34%.
Haemonetics, carrying a Zacks Rank #2 (Buy) at present, reported a fiscal 2024 fourth-quarter adjusted EPS of 90 cents, which surpassed the Zacks Consensus Estimate by 2.3%. Revenues of $343.3 million outpaced the Zacks Consensus Estimate by 5%.
HAE has an estimated fiscal 2025 earnings growth rate of 15.4% compared with the industry’s 12.5%. The company beat on earnings in each of the trailing four quarters, the average surprise being 13.2%.
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