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MAXIMUS Q3 Profit Tops View, But Revenues Miss; Cuts FY Revenue Outlook

MAXIMUS (MMS), a provider of government services worldwide, reported that its third-quarter net income attributable to the company rose to $62.9 million or $0.97 per share from $59.9 million or $0.91 per share last year. The latest-quarter result benefited from solid operational performance in the U.S. Health and Human Services and U.S. Federal Services Segments. Analysts polled by Thomson Reuters expected the company to report earnings of $0.93 per share for the quarter. Analysts' estimates typically exclude special items.

Quarterly revenue increased 22% to $730.7 million from last year's $597.9 million, driven by the acquisition in the U.S. Federal Services Segment, which contributed $163.4 million of revenue in the quarter. Analysts expected revenues of $755.08 million for the quarter.

The company cut its revenue outlook for 2019 to a range of $2.88 billion - $2.90 billion from the previous guidance of $2.925 billion - $2.95 billion, primarily due to a slower than expected ramp up on the CQA contract as well as unfavorable foreign currency translation. The company has also experienced lower volumes across several contracts resulting in lower revenue in fiscal 2019.

The company narrowed its 2019 earnings per share guidance and now expects earnings per share to range between $3.70 to $3.75 due to strong operating performance in the U.S. Health and Human Services Segment. This compared to the company's previous earnings guidance of $3.65 to $3.75.

Wall Street currently is looking for fiscal year 2019 earnings of $3.71 per share on annual revenues of $2.93 billion.

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