PRA Health Sciences (PRAH) Tops Q2 EPS by 3c, Revenues Beat: Offers FY20 EPS Outlook Above Consensus, FY20 Revenue Mid-Point View Above Consensus

PRA Health Sciences (NASDAQ: PRAH) reported Q2 EPS of $0.86, $0.03 better than the analyst estimate of $0.83. Revenue for the quarter came in at $729.9 million versus the consensus estimate of $716.72 million.

• Net new business of $701.6 million; Net book-to-bill of 1.35 excluding reimbursement revenue
• Net new business of $1,083.3 million; Net book-to-bill of 1.62 including reimbursement revenue
• $729.9 million of total revenue; representing a decrease of 4.4% at actual foreign exchange rates and 3.8% on a constant currency basis
  

“Considering the very difficult circumstances, I was delighted with our second quarter financial results. We reported revenue and earnings that were better than the revised guidance we provided in May and had record levels of gross and net new business awards. Our second quarter results were obviously impacted by the pandemic, but our team did an excellent job delivering to our revised forecast,” said Colin Shannon, PRA’s President and Chief Executive Officer. “For the remainder of 2020, we will continue to manage our business in a fiscally responsible manner and continue to look for ways to provide innovative solutions to our customers. I would like to thank all of our employees for their hard work during this challenging period.”

GUIDANCE:

PRA Health Sciences sees FY2020 EPS of $4.35-$4.55, versus the consensus of $4.31. PRA Health Sciences sees FY2020 revenue of $3.07-3.13 billion, versus the consensus of $3.07 billion.

The full extent of the COVID-19 pandemic and its impact on the Company’s 2020 operations remains uncertain. Specifically, the duration of the pandemic, the geographic location of specific outbreaks, and the length and scope of travel restrictions and business closures imposed by the governments of impacted countries could impact our financial results in the second half of 2020. These uncertainties could impact the assumptions used in the Company’s 2020 guidance if they result in business interruptions, such as the closure of our Phase I clinics, a slowdown in recruitment activities, or limited access to sites worldwide. However, the Company has used its best efforts to estimate the impact of COVID-19 on its business and the resulting impact on financial performance for the remainder of the year.

For full year 2020, the Company expects to achieve total revenues between $3.07 billion and $3.13 billion, GAAP net income per diluted share between $2.40 and $2.60 and adjusted net income per diluted share between $4.35 and $4.55, with an expected effective income tax rate of 23%.

For Q3 2020, the Company expects to achieve total revenues between $754 million and $784 million, GAAP net income per diluted share between $0.58 and $0.68 and adjusted net income per diluted share between $1.09 and $1.19, with an expected effective income tax rate of 23%.

Our actual effective tax rate may differ from our estimate due to, among other things, changes in the geographic allocation of our pre-tax income as well as changes in interpretations, analysis, and additional guidance that may be issued by regulatory agencies.

Our Full Year and Q3 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 June 30, 2020.

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

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