Post Earnings Coverage as Premier’s Q3 Non-GAAP EPS Rose 18% Y-o-Y to Beat Market Forecasts

Upcoming AWS Coverage on Medidata Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 24, 2017 / Active Wall St. announces its post-earnings coverage on Premier, Inc. (NASDAQ: PINC). The Company reported its financial results for the third quarter fiscal 2017 (Q3 FY17) on May 08, 2017. The Charlotte, North Carolina-based Company’s non-GAAP diluted EPS rose 18% y-o-y, beating market consensus estimates. Register with us now for your free membership at:

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One of Premier’s competitors within the Healthcare Information Services space, Medidata Solutions, Inc. (NASDAQ: MDSO), reported on April 26, 2017, its financial results for the first quarter of 2017. AWS will be initiating a research report on Medidata in the coming days.

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

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Earnings Reviewed

During the quarter ended on March 31, 2017, Premier reported net revenues of $379.80 million compared to $298.67 million recorded at the end of Q3 FY16. However, net revenues numbers for Q3 FY17 lagged behind market consensus estimates of $399.6 million. The Company’s services revenues increased to $241.67 million in Q3 FY17 from $218.66 million in Q3 FY16. Moreover, products revenues were up from $80.01 million in Q3 FY16 to $138.13 million in Q3 FY17.

The health care data services Company reported net loss attributable to stockholders of $79.80 million, or $1.58 loss per diluted share, in Q3 FY17 compared to net income attributable to stockholders of $299.95 million, or $0.43 per diluted share, in Q3 FY16. The Company’s non-GAAP adjusted fully distributed net income increased to $72.96 million, or $0.52 per diluted share, in Q3 FY17 from $63.92 million, or $0.44 per diluted share, in Q3 FY16. Wall Street had expected the Company to report adjusted fully distributed net income of $0.50 per diluted share.

Operational Metrics

For the reported quarter, Premier’s gross profit came in at $202.56 million, up from $186.58 million in Q3 FY16. The Company spent $123.50 million as operating expenses in Q3 FY17 compared to $111.82 million in Q3 FY16. The Company’s operating income increased to $79.05 million in Q3 FY17 from $74.76 million in Q3 FY16. Additionally, the Company reported adjusted EBITDA of $136.72 million in Q3 FY17 versus $119.93 million in last year’s comparable quarter.

Segment-wise

Premier’s Supply Chain Services segment reported revenues of $285.16 million in Q3 FY17, rising 34% y-o-y from $212.38 million in Q3 FY16. The segment’s Services revenues were up by 11% y-o-y to $147.03 million in Q3 FY17; whereas Products revenues surged 73% y-o-y to $138.13 million in Q3 FY17. Furthermore, the segment’s adjusted EBITDA came in at $127.90 million in Q3 FY17, up 8% from $118.70 million in the previous year’s same quarter.

Performance Services segment’s revenues rose 10% to $94.64 million in Q3 FY17 from $86.29 million in the last year’s comparable quarter. The Company primarily attributed the growth in the segment’s revenues to 11% growth in advisory services revenue and 9% growth in the segment’s Informatics & Technology Services business. Furthermore, the segment reported adjusted EBITDA of $36.54 million in Q3 FY17, rising 19% from $30.77 million in the prior year’s comparable quarter.

Cash Flow & Balance Sheet

During the three months ended March 31, 2017, the Company generated $135.85 million as net cash from its operating activities compared to $136.21 million in the prior year’s comparable period. Furthermore, the Company’s reported non-GAAP free cash flow of $95.55 million in Q3 FY17 compared to $97.90 million in Q3 FY16.

At the close of books on March 31, 2017, Premier had $236.22 million in cash and cash equivalents compared to $248.82 million at the close of books on June 30, 2016. The Company’s long-term debt decreased to $6.93 billion as on March 31, 2017, from $13.86 billion as on June 30, 2016.

Outlook

The Company narrowed the earnings guidance for the remainder of FY17. Premier’s management now expects Supply Chain Services segment’s net revenues to increase by 31% to 34% y-o-y and to be between $1.08 billion and $1.12 billion. Performance Services segment’s net revenues are forecasted to grow by 4% to 7% y-o-y during FY17 and be in the range of $348.0 million to $357.0 million. Furthermore, the Company’s FY17 total net revenues are expected to increase in the range of 23% to 27% and be between $1.43 billion and $1.47 billion.

The Company’s non-GAAP adjusted EBITDA is anticipated to rise by 13% to 16% during full-year FY17 and is projected to be between $500.0 million and $510.0 million. Moreover, non-GAAP adjusted fully distributed EPS is predicted to rise by 17% to 20% y-o-y and be in the range of $1.89 to $1.94.

Stock Performance

On Tuesday, May 23, 2017, Premier’s stock closed the trading session at $33.98, falling 1.56% from its previous closing price of $34.52. A total volume of 416.03 thousand shares have exchanged hands. Premier’s stock price advanced 7.09% in the last three months, 15.15% in the past six months, and 9.37% in the previous twelve months. Furthermore, on a year to date basis, the stock surged 11.92%. Shares of the company have a PE ratio of 17.25.

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