Daily News
View All NewsASGN revenue rises 10.5% on pro forma basis in Q3
Revenue at ASGN Inc. (NYSE: ASGN) rose 10.5% on a pro forma basis in the third quarter. The pro forma calculation includes revenue from the company’s acquisition of ECS Federal LLC, a government services contractor, in April of this year as if the companies were combined at the beginning of 2017. Revenue rose 35.9% on a non-pro forma basis. Revenue came in above guidance.
Calabasas, Calif.-based ASGN reported revenue rose 13.9% in its Apex segment and in 2.1% in its Oxford segment. The company also reported ECS secured $306.4 million in new awards during the quarter, which are included in its $1.5 billion contract backlog as of Sept. 30.
Gross margin narrowed, primarily due to the inclusion of ECS, which has lower margins than the firm’s other segments. On a pro forma basis, gross margin compressed to 29.8% from 30.0%, mainly related to changes in business mix.
| (US$ thousands) | Q3 2018 | Q3 2017 | % change |
| Revenue | $906,449 | $667,048 | 35.9% |
| Gross profit | $270,172 | $218,315 | 23.8% |
| Gross margin | 29.8% | 32.7% | |
| Net income | $49,172 | $34,856 | 41.1% |
ASGN ranks among the largest US staffing firms, and provides staffing IT, creative/digital, engineering and life sciences staffing.
Quote
“The US economy continues to perform well and our commercial and governmental clients are aggressively investing in their businesses,” said CEO Peter Dameris. “Against this strong economic back drop, along with a continued increase in the adoption of our ‘shared resource’ delivery model, we were able to accelerate our growth rate and expect to continue to be able to deliver above-market growth in the quarters ahead.”
Revenue by segment
| (US$ thousands) | Q3 2018 | Q3 2017 | % change |
| Apex | $589,600 | $517,500 | 13.9% |
| Oxford | $152,800 | $149,600 | 2.1% |
| ECS | $164,000 | -- | -- |
Permanent placement revenue
| (US$ thousands) | Q3 2018 | Q3 2017 | % change |
| Apex | $14,400 | $11,100 | 29.7% |
| Oxford | $22,400 | $21,600 | 3.7% |
Gross margin by segment
| Q3 2018 | Q3 2017 | |
| Apex | 30.2% | 30.1% |
| Oxford | 41.1% | 41.8% |
| ECS | 18.1% | -- |
Average bill rates
| Q3 2018 | Q3 2017 | |
| Apex | $59.89 | $58.16 |
| Oxford | $100.91 | $100.78 |
Guidance
For the fourth quarter, ASGN forecast revenue of $905.0 million to $915.0 million, gross margin of 29.5% to 30.0%, and net income of $40.9 million to $44.6 million.
Share price and market cap
Shares in ASGN were up 12.18% to $66.21 as of 11:15 a.m. Eastern time today, and the company had a market cap of approximately $3.09 billion, according to FT.com.