Broadridge Financial Solutions Earnings: Streak of Three Straight Profit Declines Snapped

Broadridge Financial Solutions Inc. (NYSE:BR) reported its results for the first quarter. Broadridge Financial Solutions is a global provider of investor communication, securities processing, and clearing and outsourcing solutions to the financial services industry.

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Broadridge Financial Solutions Inc. Earnings Cheat Sheet

Results: Net income for Broadridge Financial Solutions Inc. rose to $18 million (14 cents per share) vs. $16.7 million (13 cents per share) in the same quarter a year earlier. This marks a rise of 7.8% from the year-earlier quarter.

Revenue: Rose 4.1% to $496 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Broadridge Financial Solutions Inc. fell short of the mean analyst estimate of 16 cents per share. It fell short of the average revenue estimate of $563.8 million.

Quoting Management: Commenting on the results, Richard J. Daly, Chief Executive Officer, said, “Overall, I am satisfied with our first quarter results. For the quarter, our recurring revenues grew 3% and recurring revenue closed sales were down approximately 30% compared with last year. There were no recurring revenue closed sales from transactions of greater than $5 million and our recurring revenue closed sales of less than $5 million grew by approximately 8%. Our pipeline for all sales — large and small — is strong. Due to the seasonal nature of our business, our first quarter makes the smallest quarterly contribution to our annual results.” Mr. Daly concluded, “We expect to achieve our full year guidance as a result of our strong sales pipeline, 99% client revenue retention rate, and overall momentum driven by our leading brand and growing product strength.”

Key Stats:

Revenue has increased for four quarters in a row. Revenue increased 2.9% to $798.4 million in the fourth quarter of the last fiscal year. The figure rose 3.8% in the third quarter of the last fiscal year from the year earlier and climbed 8.6% in the second quarter of the last fiscal year from the year-ago quarter.

Last quarter’s profit increase breaks a streak of three consecutive quarters of year-over-year profit decreases. In the fourth quarter of the last fiscal year, net income fell 28.2% from the year earlier, while the figure dropped 43.8% in the third quarter of the last fiscal year and 34.6% in the second quarter of the last fiscal year.

The company fell short of forecasts after beating estimates in the previous two quarters. In the fourth quarter of the last fiscal year, it topped the mark by 2 cents, and in the third quarter of the last fiscal year, it was ahead by one cent.

Looking Forward: The average estimate for the second quarter remains unchanged at 18 cents a share. The average estimate for the fiscal year is $1.71 per share, down from $1.74 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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