Genpact Q4 Results Top Estimates; Issues Guidance

Genpact (G) delivered better-than-expected fourth-quarter and full-year results as the company continued to invest for long-term growth. Revenue and earnings came in above analyst estimates and exceeded the company’s guidance. G shares fell 7.24% to close at $44.85 on February 11.

Genpact is a consulting and analytics company that designs and runs intelligent operations and transformation services. It focuses on business process management, outsourcing, and shared services. Genpact’s upcoming earnings report for Q1 2022 is scheduled for May 05, 2022.

Genpact Earnings

Revenue in the fourth quarter was up 13% year-over-year to $1.1 billion, beating consensus estimates of $911.9 million. The increase was driven by a 16% growth in revenue from Global clients, helping offset a 14% year-over-year decline in GE business revenue. Full-year sales were up 8% year-over-year to $4 billion.

Net income in the quarter was down 3% year-over-year to $73 million. Genpact posted adjusted diluted earnings per share of $0.54, up 6% year-over-year and better than consensus estimates of $0.46 a share. Cash generated from operations was up 55% year-over-year to $247 million.

Genpact expects revenue to increase by between 7% and 9% to between $4.3 billion and $4.4 billion for the full year. Adjusted diluted earnings per share are expected to range between $2.53 and $2.71

During the quarter, Genpact repurchased 2.98 million shares of common stock for approximately $50.56 a share. The board of directors has also approved a 16% increase in quarterly cash dividends to $0.125 a share to be paid on March 23, 2022, to shareholders of or record as of March 10, 2020.  Genpact dividends have increased over the past 5 years leading to a dividend yield of 0.99%

Stock Rating

Last month, Robert W. Baird analyst David Koning reiterated a Buy rating on the stock with a $62 price target, implying 38.24% upside potential to current levels. The analyst expects the company’s growth to be a little better in the coming years.

Consensus among analysts is a Moderate Buy based on 2 Buys and 1 Hold. The average Genpact price target of $59 implies 31.55% upside potential to current levels.

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