GovCon Index-listed Maximus (NYSE: MMS) released earnings and revenue guidance for fiscal year 2017 below the consensus Wall Street forecast Thursday in part on expectations of 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 of $2.475 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 of 9.24 percent growth year-over-year and 93 percent of its 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 plunged 16.94 percent to $45.25 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 million for services exclusively tied to ACA, while $100 million in annual sales related to the law has already gone away after work in five states ended after they decided to return to the federal exchange.
Maximus included $110 million total of unfavorable impacts on sales in its guidance with $50 million related to the pound’s weakening as its contracts in the U.K. include the Fit for Work program to help workers return to their jobs through a wellness plan.
The company also supports the U.K. Health Assessment Advisory Service’s work to determine eligibility 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 program in its federal services segment at an agency currently evaluating long-term plans for that initiative and another $20 million from a contract the company will not rebid.
Fourth quarter earnings came in at $0.77 per share to exceed analysts’ forecasts of $0.72 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 climbed 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 climbed 11.51 percent on a year-to-date basis and is up 7.74 percent for 52 weeks.