Post Earnings Coverage as MAXIMUS Q4 EPS Surges 45%

Upcoming AWS Coverage on S&P Global Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 18, 2016 / Active Wall St. announces its post-earnings coverage on MAXIMUS, Inc. (NYSE: MMS). The company posted its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year 2016 (FY16) on November 10, 2016. The Reston, Virginia-based company reported quarterly revenue growth of 8% y-o-y, while GAAP diluted earnings per share surged 45% y-o-y in the reported quarter. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of MAXIMUS’ competitors within the Business Services space, S&P Global, Inc. (NYSE: SPGI), reported on November 03, 2016, third quarter 2016 results. AWS will be initiating a research report on S&P Global in the coming days.

Today, AWS is promoting its earnings coverage on MMS; touching on SPGI. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=MMS

http://www.activewallst.com/registration-3/?symbol=SPGI

Earnings Reviewed

During Q4 FY16, MAXIMUS’s revenue rose to $623.09 million from $578.68 million recorded at the end of Q4 FY15. Total revenue numbers for the reported quarter outperformed consensus market expectations by $12.6 million. The company attributed this quarterly rise in revenues primarily to organic growth of 9% and acquired growth of 1%, partially offset by a 2% decline related to unfavorable foreign currency translation.

For the three months ended on September 30, 2016, the company reported gross profit of $152.93 million versus $125.31 million in Q4 FY15. During the reported quarter, operating income came in at $81.31 million compared to $61.53 million, in the prior year’s quarter.

The business process services provider’s GAAP net income attributable to MAXIMUS totaled $50.74 million, or $0.77 diluted per share, in Q4 FY16 compared to $35.44 million, or $0.53 per share, in the year ago quarter. The company’s reported better-than-expected GAAP net income, primarily due to favorability in the company’s appeals and assessments business. Furthermore, the quarterly GAAP net income beat market expectations of $0.72 per diluted share.

For FY16, the company’s revenue was $2.40 billion, up 14.5% y-o-y from $2.10 billion in the year ago period. The annual revenue growth was driven by organic growth of 9% and acquired growth of 8%, partially offset by a 2% decline from unfavorable foreign currency translation. Furthermore, GAAP net earnings from continuing operations attributable to MAXIMUS for FY16 came in at $178.36 million, or $2.69 per diluted share, compared to $157.77 million, or $2.35 per diluted share, in FY15.

Segment Performance

During Q4 FY16, Health Services segment’s revenue was $342.13 million, up 16% y-o-y from $296.20 million in Q4 FY15. Segment operating income for Q4 FY16 came in at $50.87 million versus $30.5 million in prior year’s quarter. During the reported quarter, the segment’s operating margin improved to 14.9% of segment revenues from 10.3% of segment revenues in the year ago quarter.

U.S. Federal Services segment contributed $146.65 million to total revenue during Q4 FY16, down 5% from $154.28 million in the last year’s comparable period. The decline in segment revenues was principally due to lower volumes on a large healthcare contract. The segment reported operating income of $18.56 million in Q4 FY16 compared to operating income of $20.90 million in the year ago quarter. Additionally, the segment’s operating margin fell to 12.7% of segment revenues in Q4 FY16 from 13.5% of segment revenues in prior year’s quarter.

MAXIMUS’s Human Services segment reported revenues of $134.31 million compared to $128.20 million for the same period last year. The segment’s operating income for Q4 FY16 totaled $14.53 million versus $13.35 million in Q4 FY15. Furthermore, the segment’s Q4 FY16 operating margin improved marginally to 10.8% of segment revenues from 10.4% of segment revenues in Q4 FY15.

Cash Flow and Balance Sheet

In the reported quarter, MAXIMUS’s cash provided by operating activities totaled $71.89 million compared to $25.24 million in the previous year’s quarter. Free cash flow for the quarter came in at $59.61 million in Q4 FY16 versus negative free cash flow $6.75 million in Q4 FY15.
As of September 30, 2016, the company had cash and cash equivalents balance of $66.20 million compared to $74.67 million, at the close of books on September 30, 2015. The company recorded long-term debt of $165.34 million as on September 30, 2015, compared to $210.62 million at September 30, 2015.

Dividend and Share Repurchases

In a separate press release on October 19, 2016, MAXIMUS’s Board of Directors declared a cash dividend of $0.045 per share. The dividend is payable on November 30, 2016, to stockholders of record at the close of business on November 15, 2016.

During FY16, the company repurchased approximately 587,000 shares for $31.3 million. Furthermore, from September 30, 2016 through November 08, 2016, it had bought back additional 243,000 shares of stock for $12.8 million. As of November 08, 2016, the company has $124 million available under its Board-authorized share repurchase program.

Outlook

For full year FY17, MAXIMUS anticipates revenue to be in the range of $2.48 billion to $2.55 billion. Additionally, GAAP diluted earnings per share for FY17 is expected to lie between $2.90 and $3.10.

Stock Performance

MAXIMUS’ stock rose by 1.25%, closing Thursday’s session at $55.07 on volume of 481.44 thousand shares, which was higher than the 3 months average volume of 388.10 thousand shares. In the last one month and past one year, shares of the company have gained 2.27% and 4.97%, respectively. The company’s shares are trading at a PE ratio of 22.55 and have a dividend yield of 0.33%.

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