GovCon Index-listed Maximus (NYSE: MMS) released earnings and revenue guidance for fiscal year 2017 below the consensus Wall Street forecast ThursdayÂ in part on expectations ofÂ continued headwinds from the British pound’s post-Brexit weakening.
The Reston, Virginia-based government services contractor forecasts earnings of $2.90-$3.10 per share versus the analysts’ midpoint forecast of $3.08 at revenue ofÂ $2.475Â billion-$2.55 billion compared to Wall Street’s outlook of $2.59 billion for FY 2017 that started in October.
The midpoint of Maximus’ revenue guidance indicates expectations ofÂ 9.24 percent growth year-over-year andÂ 93 percent of itsÂ FY 2017 forecasted sales exists in backlog, option periods or extensions.
Backlog totaled approximately $4 billion with year-to-date signed contract awards at $2.1 billion as of Sept. 30.
Maximus unveiled its FY 2017 outlook a day after the company’s stock plungedÂ 16.94Â percent to $45.25Â in the first full trading day after Donald Trump’s election to the White House as investors noted his campaign pledge to repeal the Affordable Care Act.
Maximus’ FY 2017 revenue forecast includes $160 millionÂ for servicesÂ exclusively tied to ACA, while $100 million in annual sales related to the lawÂ has already gone awayÂ after work in five states ended after they decided to return to the federal exchange.
Maximus included $110 million total ofÂ unfavorable impacts onÂ sales in its guidance with $50 million related to the pound’s weakeningÂ as its contractsÂ in the U.K. include theÂ Fit for Work program to help workers return to their jobsÂ through a wellness plan.
The company also supports theÂ U.K. Health Assessment Advisory Service’s work to determine eligibilityÂ of individuals with disabilities or long-term illnesses for government benefits.
FY 2017 revenue guidance also includes a $40 million unfavorable impact from a healthcare programÂ in its federal services segment at an agency currently evaluating long-term plans for that initiative and another $20 millionÂ from a contract the company will not rebid.
Fourth quarter earnings came in at $0.77 per share to exceed analysts’ forecasts of $0.72Â and full-year EPS totaled a company record $2.69 versus Wall Street’s expectation of$2.65.
Revenue for the July-September period rose 7.67 percent to $623 million and 12-month sales climbedÂ 14.48 percent to $2.4 billion on contributions in the company’s health services and human services segments.
Wall Street analysts expected Maximus to report $610.49 million in fourth quarter revenue and $2.39 billion in full-year sales.
As of Wednesday’s close, shares in Maximus have declined 3.15 percent since the start of the year and are down 34.14 percent over 12 months.
By comparison, the GovCon Index has climbedÂ 11.51 percent on a year-to-date basis and is upÂ 7.74 percent for 52 weeks.