News

ICON plc ICLR delivered fourth-quarter 2023 adjusted earnings per share of $3.46, an increase of 10.5% from the year-ago period’s figure. The metric surpassed the Zacks Consensus Estimate by 0.6%.

For the full year, adjusted earnings were $12.79 per share, down 8.9% from the year-ago period’s levels. The metric beat the Zacks Consensus Estimate by 0.2%.

Revenues

Total revenues in the fourth quarter rose 5.3% year over year to $2.07 billion. The metric missed the Zacks Consensus Estimate by 0.9%.

Gross business wins in the fourth quarter were $2.99 billion and cancellations were $461 million. This resulted in net business wins of $2.53 billion and a book-to-bill of 1.22.

Total revenues for 2023 were $8.12 billion, reflecting a 4.9% rise from the year-ago period. The figure missed the Zacks Consensus Estimate by 0.2%.

Margins

The gross profit in the fourth quarter increased 6.7% year over year to $6.20 billion. Meanwhile, the gross margin expanded 40-basis points (bps) year over year to 30%.

During the quarter, Selling, general and administrative expenses fell 13.8%.

The adjusted operating income in the quarter under review was $1.95 billion, highlighting a decrease of 13.8%. The adjusted operating margin expanded 249 bps to 20.6%.

Cash Position

ICON exited 2023 with cash and cash equivalents of $378.1 million compared with $288.8 million at the end of 2022. The company ended 2023 with no debt on its balance sheet.

Neogen Corporation Price, Consensus and EPS Surprise

Cumulative cash flow provided by operating activities at the end of 2023 was $1.16 billion compared to $563 million in the prior year’s comparable period.

Guidance

The company is re-affirming full-year 2024 financial guidance:

Full-year 2024 revenues are expected in the range of $8.40-$8.80 billion, suggesting growth of 3.4-8.4%. The Zacks Consensus Estimate for the same is pegged at $8.63 billion.

Full-year 2024 adjusted earnings per share are expected to be in the range of $14.50-$15.30, calling for growth of 13.4-19.6%. The Zacks Consensus Estimate for the same is pegged at $14.85.

Our Take

ICON ended the fourth quarter of 2023 on a mixed note, with earnings beating the estimate and revenues miss. The company is focused on delivering innovative clinical development solutions. ICON’s solid performance in the reported quarter reflects continued market leadership across the customer segments it serves.

The company had no debt obligation in its balance sheet, which looks encouraging. Further, the expansion of both margins is an added advantage. The upbeat 2024 guidance instills optimism on the stock. However, stiff competition and foreign exchange continue to impact the company’s performance.

Zacks Rank and Key Picks

ICON currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader medical space are Stryker Corp. SYK, Cencora, Inc. COR and Cardinal Health CAH.

Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.

Cencora, carrying a Zacks Rank #2, reported a first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.

COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.

Cardinal Health reported second-quarter fiscal 2024 adjusted earnings of $1.82, beating the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion increased 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.

CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.

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