Company reports strong quarterly results. Share price jumps. Company takes its place among the upper echelon of the Zacks #1 Rank Top Performers List.
Hopefully, we’ll be seeing a lot of the above-mentioned scenario in the coming weeks as this young earnings season progresses. That was certainly the case for iGATE (IGTE) today, as the information technology and outsourcing company gained more than 14%, making it the best-performing Zacks #1 Rank. It was also the only name on the list to break into the double digits on an overall soft day for the market.
Volume eclipsed 1.2 million shares Wednesday, compared to the daily average of a little more than 200,000.
The great thing about earnings season is you can almost always tell the reasons behind a company’s performance. Today, IGTE responded to a strong second-quarter report, including year-over-year advances in EPS and revenue, as well as a positive earnings surprise.
iGATE offers a comprehensive range of information technology solutions. It specializes in areas such as offshore outsourcing, enterprise applications and IT staffing, all available via a variety of strategic delivery models.
IGTE is one of only two companies from the computer services industry on today’s Zacks #1 Rank List. The other company is Forrester Research, Inc. (FORR).
Strong Second-Quarter Report
Earlier today, iGATE reported second-quarter earnings per share of 20 cents, compared to 11 cents in the year-ago quarter. That result beat the Zacks Consensus Estimate of 17 cents by more than 17%. IGTE has now put together 2 straight quarters of better-than-expected profit. In the last 10 quarters, it has beaten 7 times, missed twice and matched once.
Revenues jumped $42.7 million year over year to $66.8 million from $46.8 million. The company added four new customers during the quarter.
“We think there is a window of opportunity for a differentiated company like iGATE to build scale,” said iGATE CEO Phaneesh Murthy. “We are encouraged by the new client wins and the quality of prospects we are talking to.”
Earnings Estimates for iGATE
These results will probably convince analysts to give the company’s earnings estimates a boost. Expectations for this year and next have been steady over the past 30 days, but remain higher than 2 months ago.
The Zacks Consensus Estimate for this year, derived from 5 total estimates, is 77 cents per share, which is up 6.9% from 3 months ago and 1.3% from 2 months ago.
Meanwhile, with the same number of estimates, the Zacks Consensus Estimate for next year is 88 cents per share, up 7.3% from 3 months ago and 3.5% from 2 months ago. This outlook also suggests a year-over-year improvement of more than 14%.
As for the third quarter, the Zacks Consensus Estimate is currently 19 cents per share, compared to 16 cents last year.
