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Why Is Broadridge Financial (BR) Down 5.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Broadridge Financial Solutions (BR - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Broadridge Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Broadridge Beats Q3 Earnings Estimates
Broadridge Financial Solutions, Inc. reported mixed third-quarter fiscal 2023 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings of $2.05 per share beat the consensus mark by 2% and our estimate by 1% and increased 6.2% year over year. Total revenues of $1.65 billion missed the consensus mark and our estimate, both by a slight margin, but were up 7.3% year over year.
Recurring revenues of $1.08 billion increased 8% from the year-ago quarter’s level. The company generated closed sales of $62 million in the quarter, up 8% year over year.
Revenues by Segment
Revenues in the Investor Communication Solutions segment increased 8% from the year-ago quarter’s level to $1.26 billion. The Global Technology and Operations segment’s revenues came in at $388 million, up 4% from the year-ago quarter’s figure. The improvement was mainly driven by new sales and internal growth.
Operating Results
Adjusted operating income of $345 million increased 10% year over year. Adjusted operating income margin of 21% increased 60 basis points (bps) year over year.
Balance Sheet and Cash Flow
Broadridge exited the quarter with cash and cash equivalents of $331.6 million compared with $280 million at the end of the prior quarter. Long-term debt was $4.1 billion, flat with the previous quarter’s tally.
The company generated $175.5 million in cash from operating activities and capex was $5.5 million in the quarter. It paid out $85.4 million in dividends in the reported quarter.
Fiscal 2023 Guidance
Broadridge expects recurring revenue growth to be 6-9%. Adjusted earnings per share growth is expected to be 7-11%. Adjusted operating income margin is estimated to be up by around 50 bps. Closed sales are anticipated between $270 million and $310 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Broadridge Financial has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Broadridge Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Broadridge Financial (BR) Down 5.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Broadridge Financial Solutions (BR - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Broadridge Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Broadridge Beats Q3 Earnings Estimates
Broadridge Financial Solutions, Inc. reported mixed third-quarter fiscal 2023 results with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Adjusted earnings of $2.05 per share beat the consensus mark by 2% and our estimate by 1% and increased 6.2% year over year. Total revenues of $1.65 billion missed the consensus mark and our estimate, both by a slight margin, but were up 7.3% year over year.
Recurring revenues of $1.08 billion increased 8% from the year-ago quarter’s level. The company generated closed sales of $62 million in the quarter, up 8% year over year.
Revenues by Segment
Revenues in the Investor Communication Solutions segment increased 8% from the year-ago quarter’s level to $1.26 billion. The Global Technology and Operations segment’s revenues came in at $388 million, up 4% from the year-ago quarter’s figure. The improvement was mainly driven by new sales and internal growth.
Operating Results
Adjusted operating income of $345 million increased 10% year over year. Adjusted operating income margin of 21% increased 60 basis points (bps) year over year.
Balance Sheet and Cash Flow
Broadridge exited the quarter with cash and cash equivalents of $331.6 million compared with $280 million at the end of the prior quarter. Long-term debt was $4.1 billion, flat with the previous quarter’s tally.
The company generated $175.5 million in cash from operating activities and capex was $5.5 million in the quarter. It paid out $85.4 million in dividends in the reported quarter.
Fiscal 2023 Guidance
Broadridge expects recurring revenue growth to be 6-9%. Adjusted earnings per share growth is expected to be 7-11%. Adjusted operating income margin is estimated to be up by around 50 bps. Closed sales are anticipated between $270 million and $310 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Broadridge Financial has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Broadridge Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.