ICF International (ICFI) Beats On Q2 Earnings And Revenues

ICF International, Inc. (NASDAQ:ICFI) reported strong second-quarter 2019 results, with earnings and revenues beating the Zacks Consensus Estimate.

Non-GAAP EPS of 97 cents beat the consensus mark by 4 cents and improved 21.3% on a year-over-year basis driven by strong operating performance.

Revenues came in at $366.7 million, which outpaced the consensus mark by $10 million and increased 13.1% year over year. Disaster recovery programs, marketing services and energy efficiency implementation programs and higher revenues from U.S. federal government agency clients drove the top line.

Shares of the company have gained 25.3% year to date, underperforming the 33.8% rally of the industry it belongs to.

Revenues in Detail

Revenues from government clients came in at $245.7 million and improved 17.8% year over year. U.S. federal government revenues of $141.2 million increased 1.2% year over year and contributed 38% to total revenues. U.S. state and local government revenues of $72.9 million surged more than 100% year over year and contributed 20% to total revenues. International government revenues of $31.7 million, down 8.4% year over year on a reported basis and 2.6% on a constant-currency basis, contributed 9% to total revenues.

Commercial revenues totaled $121 million, up 4.6% from the year-ago quarter’s figure and contributed 33% to total revenues. Energy markets contributed 45% to commercial revenues and Marketing services contributed 46% to the same.

ICF International, Inc. Revenue (TTM)

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $2.4 billion and $1 billion at the end of the quarter, respectively. The total value of contracts awarded was $403.1 million, representing a trailing 12 month book-to-bill ratio of 1.15.

Operational Results

Adjusted EBITDA was $32.7 million, up 19.5% from the year-ago quarter’s figure, driven by favorable revenue mix, increased service revenue and higher utilization. Adjusted EBITDA margin was 13% of service revenues, up 110 basis points (bps) year over year.

Balance Sheet

At the end of the quarter, cash and cash equivalent balance was $6.3 million compared with $5.7 million at the end of the previous quarter. The company had a long-term debt of $288.5 million compared with $232.3 million at the end of the prior quarter.

ICF used $35.3 million of cash in operating activities and capex was $7million. The company purchased 126,000 shares for $9.4 million and paid out dividends of $2.6 million in the quarter.

2019 Outlook

ICF updated its guidance for the year. Management now expects total revenues between $1.475 billion and $1.5 billion, compared with the previous guidance of $1.45 billion and $1.50 billion. The Zacks ICF Consensus Estimate is pegged at $1.49 billion.

Non-GAAP EPS is expected in the range of $4.10 to $4.25, compared with the prior expectation of $4.05-$4.25. The Zacks Consensus Estimate stands at $4.21.

Zacks Rank & Other Stocks to Consider

Currently, ICF carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the broader Zacks Business Services sector include Accenture (NYSE:ACN) , ExlService (NASDAQ:EXLS) and CRA International (NASDAQ:CRAI) , each carrying a Zacks Rank #2.

The long-term expected EPS (three to five years) growth rate for Accenture, ExlService and CRA International is 10.3%, 10.6% and 13%, respectively.

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