Gartner Shares Up as Profit Beats, Guidance Is Raised

Gartner beat analyst expectations for the third-quarter revenue and earnings and raised its full-year guidance.
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Gartner  (IT) - Get Report shares rose after the research and advisory firm reported better-than-expected earnings and revenue and raised guidance for the full year.

Shares of the Stamford, Conn., company at last check were up 12% at $140.37.

The company posted earnings of $17 million, or 19 cents a share, down 59% from $41 million, or 46 cents, in the year-earlier period.

Revenue eased 0.6% to $995 million from $1 billion.

A survey of analysts by FactSet produced consensus estimates of GAAP net income of 17 cents a share, or an adjusted 53 cents, on revenue of $928.1 million.

"In the third-quarter, we delivered strong performances in revenue, adjusted Ebitda and free cash flow," Chief Executive Gene Hall said in a statement.

The company's free cash flow was up 25% to $229 million from $183 million in the year-ago period. Its adjusted Ebitda was up 20% to $168 million.

"We raised guidance for the full year as demand is tracking above our prior expectations," Hall said. 

He expects "sustained double-digit growth in cash flow."

The research company raised its 2020 guidance for adjusted earnings to $4.07 a share from an August estimate of $3.08.

The FactSet estimate for the year is $3.18 a share.

Gartner lifted its expectation for total revenue to $4.05 billion from the August estimate of $3.88 billion. It expects adjusted Ebitda of $740 million, compared with $635 million. 

In September Gartner started an unregistered offering of $800 million in senior debt that will be due in 2030.

Gartner had said it intended to use the net proceeds from the offering, together with cash on hand, to redeem all $800 million of its 5.125% senior notes due 2025 and to pay related fees and expenses.