What happened
Now this is an earnings beat.
Tuesday morning, top IT business analysis company Gartner (IT +1.41%) reported its second-quarter results, which obliterated analyst estimates for profitability. Consequently, the company's stock shot higher and stayed there; in late afternoon trading it was up by over 10%.
So what
For the period, Gartner earned $1.2 billion. That was a 20% improvement over the same quarter last year. Net income saw a much sharper rise, advancing 85% to $271 million. On a non-GAAP (adjusted) basis the company earned $2.24 per share.
On average, prognosticators following the stock were expecting only $1.12 billion on the top line and adjusted per-share net income of $1.73.
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Revenue from Gartner's classic product line, its IT market research, grew by almost 15% in the quarter, helped greatly by an over-200% leap in proceeds for industry conferences. Consulting revenue rose more sluggishly, climbing by 9%.
On the back of those encouraging growth numbers, Gartner has raised its 2021 guidance. The company now believes it will book $4.57 billion on the top line (previous outlook: $4.51 billion) and net an adjusted, per-share profit of $7.60, up from the previous $6.25. Free cash flow should come in at $1.13 billion, substantially higher than the formerly expected $850 million.
Now what
As the tech sector continues to ever broaden and deepen, demand for the market intelligence Gartner specializes in should rise commensurately. The company's rosy 2021 projections, then, feel entirely realistic.
