RICHMOND, Va. - ASGN (NYSE:ASGN) Incorporated (NYSE: ASGN), a prominent IT services and solutions provider, reported its financial outcomes for the second quarter ended June 30, 2024. The company announced a slight beat on adjusted earnings per share (EPS) but a miss on revenue expectations. Shares were down 3.3% following the results.
For the second quarter, ASGN reported adjusted EPS of $1.36, which was $0.03 higher than the analyst consensus of $1.33. However, the company's revenue for the quarter was $1.04 billion, falling short of the consensus estimate of $1.05 billion. This represents a decrease of 8.5% from the same quarter last year, with Commercial Segment revenues down 10.6% and Federal Government Segment revenues down 3.3% YoY.
ASGN's CEO, Ted Hanson, commented on the quarter's performance, stating, "Revenues were $1.035 billion for the second quarter, while Adjusted EBITDA margin of 11.3 percent was at the top of our expectations." He also highlighted the company's strategic progress towards higher-value IT consulting solutions, noting an increase in IT consulting revenues to 57.1% of consolidated revenues, up from 53.1% a year ago.
Despite the revenue decline, the company's gross margin improved slightly to 29.1%, a 20 basis point increase from the second quarter of 2023. Gross margin for the Commercial Segment rose by 50 basis points, driven by a higher mix of consulting revenues and margin expansion for both consulting and assignment revenues. Gross margin for the Federal Government Segment also increased by 10 basis points.
Net income for the quarter was reported at $47.2 million ($1.02 per diluted share), compared to $60.1 million ($1.22 per diluted share) in the second quarter of 2023. Adjusted EBITDA was $117.1 million, or 11.3% of revenues, compared with $135.2 million or 12.0% of revenues in the prior-year quarter.
Looking ahead, ASGN provided financial estimates for the third quarter of 2024, projecting revenues between $1.024 billion and $1.044 billion. The midpoint of this guidance range is below the analyst consensus, which has not been provided. Adjusted EBITDA is estimated to be between $114.0 million and $119.0 million, with adjusted EBITDA margins anticipated to be between 11.1% and 11.4%.
ASGN's capital allocation in the second quarter included the repurchase of 1.1 million shares of its common stock for $108.0 million, with approximately $667.0 million remaining available for repurchases under the company's stock repurchase plan.
The company's financial health remains robust, with $132.2 million in cash and cash equivalents and full availability under its $500.0 million Senior Secured Revolving Credit Facility. ASGN's Senior Secured Debt stood at $496.3 million, and it held senior unsecured notes totaling $550.0 million at 4.625 percent due in 2028.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.