PRA Health Sciences (PRAH) Tops Q1 EPS by 4c, Revenues Beat; Offers 2Q EPS Below Consensus, 2Q Revs. Above Views, Withdraws FY20 Outlook

PRA Health Sciences (NASDAQ: PRAH) reported Q1 EPS of $1.05, $0.04 better than the analyst estimate of $1.01. Revenue for the quarter came in at $783.7 million versus the consensus estimate of $754.68 million.

• Net new business of $604.7 million; Net book-to-bill of 1.10 excluding reimbursement revenue
• Net new business of $955.9 million; Net book-to-bill of 1.32 including reimbursement revenue
• $783.7 million of total revenue; representing 8.5% growth at actual foreign exchange rates and 9.3% growth on a constant currency basis
• GAAP net income per diluted share of $0.63 and GAAP net income of $40.7 million
• Adjusted net income per diluted share was $1.05 and adjusted net income was $67.3 million
• Withdrawing full year 2020 guidance due to the uncertainty around the impact of the COVID-19 pandemic on our full year results of operations
• Providing second quarter 2020 revenue guidance of between $705 million and $740 million, GAAP net income per diluted share of between $0.32 and $0.46 and Adjusted net income per diluted share of between $0.75 and $0.90

"During these unprecedented times, we have focused on the health and safety of employees putting into practice what we have always said about our people being our most important asset. Due to the ongoing impact of COVID-19, we have prioritized employees' well-being and have worked diligently with our customers to ensure that we mitigate the impact that this pandemic is having on their studies," said Colin Shannon, PRA's President and Chief Executive Officer.

"Our first quarter financial results were impacted by the pandemic, particularly during the latter part of the quarter, when decisions on new business were delayed and stay-at-home orders created challenges in conducting our business. However, we still produced revenue and earnings that were in line with the guidance we provided back in February. As the world started moving into lockdown we worked creatively with clients to help them find solutions for their on-going studies. Through the use of our mobile health platform and our remote monitoring technology, we were able to mitigate some of the impact the lockdown had on our financial results.

"With all the uncertainty of how this pandemic will unfold, it is extremely difficult to estimate the impact to our financial results, but we will continue to manage our business in a very fiscally responsible manner and continue to be innovative in finding solutions for our clients. We have significantly reduced our debt levels over the past few years, and we are well-positioned to weather the challenging economic conditions that we may continue to face. I would also like to add that we are extremely thankful to all those who are helping the world get through this global pandemic."

GUIDANCE:

PRA Health Sciences sees Q2 2020 EPS of $0.75-$0.90, versus the consensus of $0.95. PRA Health Sciences sees Q2 2020 revenue of $705-740 million, versus the consensus of $684.43 million.

• The Company is withdrawing its full year 2020 guidance. Due to the uncertain scope and duration of the COVID-19 pandemic and uncertain timing of global recovery and economic normalization, the Company is unable to estimate with confidence the full-year overall impact on its global operations.
• For Q2 2020, the Company expects to achieve total revenues between $705.0 million and $740.0 million, GAAP net income per diluted share of between $0.32 and $0.46, adjusted net income per diluted share of between $0.75 and $0.90, and an effective income tax rate of 23%.
• Our Q2 2020 guidance assumes a EURO rate of 1.15 and a GBP rate of 1.30. All other foreign currency exchange rates are as of March 31, 2020.

For earnings history and earnings-related data on PRA Health Sciences (PRAH) click here.

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