Gartner Inc. (IT, Financial) filed Quarterly Report for the period ended 2010-03-31.
Gartner Inc. has a market cap of $2.27 billion; its shares were traded at around $23.69 with a P/E ratio of 28.5 and P/S ratio of 2. Gartner Inc. had an annual average earning growth of 21.2% over the past 10 years. GuruFocus rated Gartner Inc. the business predictability rank of 4.5-star.IT is in the portfolios of Ron Baron of Baron Funds, Chuck Royce of Royce& Associates, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Research revenues were up 12% quarter-over-quarter, to $210.7 million in the first quarter of 2010 from $187.7 million in the prior year quarter. The contribution margin was 66% for both periods. At March 31, 2010, Research contract value was over $864.0 million, an increase of 14% over March 31, 2009, with approximately half of the increase due to the acquisitions of AMR Research and Burton Group. Client retention was 80% and wallet retention was 89% at March 31, 2010.
For those government contracts that permit termination, we bill the client the full amount billable under the contract but only record a receivable equal to the earned portion of the contract. In addition, we only record deferred revenue on these government contracts when cash is received. Deferred revenues attributable to government contracts were $68.9 million and $65.3 million at March 31, 2010 and December 31, 2009, respectively. In addition, at March 31, 2010 and December 31, 2009, we had not recognized uncollected receivables or deferred revenues relating to government contracts that permit termination of $6.6 million and $8.3 million, respectively.
Selling, general and administrative (SG&A) was $15.0 million higher quarter-over-quarter, or 13%. The unfavorable impact of foreign currency translation increased expense by about $4.6 million. We also had approximately $11.6 million of higher sales commissions, payroll, and other personnel charges, which includes additional headcount costs due to the AMR Research and Burton Group acquisitions, as well as higher stock-based compensation expense. Somewhat offsetting these increases were $1.2 million in reduced charges for severance, recruiting, and other items.
Amortization of intangibles was $2.9 million in the three months ended March 31, 2010 compared to $0.4 million in the same period in 2009. The increase was due to the intangibles recorded related to the acquisitions of AMR Research and Burton Group in December 2009.
Net Income was $19.4 million and $20.0 million for the three months ending March 31, 2010 and 2009, respectively. Basic earnings per share declared $0.01 per share, while diluted earnings per share was down by $0.02 per share quarter-over-quarter due to lower net income and a higher number of diluted shares in the first quarter of 2010.
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Gartner Inc. has a market cap of $2.27 billion; its shares were traded at around $23.69 with a P/E ratio of 28.5 and P/S ratio of 2. Gartner Inc. had an annual average earning growth of 21.2% over the past 10 years. GuruFocus rated Gartner Inc. the business predictability rank of 4.5-star.IT is in the portfolios of Ron Baron of Baron Funds, Chuck Royce of Royce& Associates, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
We had total revenues of $295.8 million in the three months ended March 31, 2010, an increase of 8%, or $22.3 million, compared to the prior year quarter. Revenues increased in our Research and Consulting segments but declined in Events. Excluding the impact of foreign currency translation, total revenues were up about 4%. We had net income of $19.4 million in the first quarter of 2010, a decrease of 3% from the prior year quarter. Diluted earnings per share was $0.19 per share in the first quarter of 2010 compared to $0.21 in the prior year quarter.Research revenues were up 12% quarter-over-quarter, to $210.7 million in the first quarter of 2010 from $187.7 million in the prior year quarter. The contribution margin was 66% for both periods. At March 31, 2010, Research contract value was over $864.0 million, an increase of 14% over March 31, 2009, with approximately half of the increase due to the acquisitions of AMR Research and Burton Group. Client retention was 80% and wallet retention was 89% at March 31, 2010.
For those government contracts that permit termination, we bill the client the full amount billable under the contract but only record a receivable equal to the earned portion of the contract. In addition, we only record deferred revenue on these government contracts when cash is received. Deferred revenues attributable to government contracts were $68.9 million and $65.3 million at March 31, 2010 and December 31, 2009, respectively. In addition, at March 31, 2010 and December 31, 2009, we had not recognized uncollected receivables or deferred revenues relating to government contracts that permit termination of $6.6 million and $8.3 million, respectively.
Selling, general and administrative (SG&A) was $15.0 million higher quarter-over-quarter, or 13%. The unfavorable impact of foreign currency translation increased expense by about $4.6 million. We also had approximately $11.6 million of higher sales commissions, payroll, and other personnel charges, which includes additional headcount costs due to the AMR Research and Burton Group acquisitions, as well as higher stock-based compensation expense. Somewhat offsetting these increases were $1.2 million in reduced charges for severance, recruiting, and other items.
Amortization of intangibles was $2.9 million in the three months ended March 31, 2010 compared to $0.4 million in the same period in 2009. The increase was due to the intangibles recorded related to the acquisitions of AMR Research and Burton Group in December 2009.
Net Income was $19.4 million and $20.0 million for the three months ending March 31, 2010 and 2009, respectively. Basic earnings per share declared $0.01 per share, while diluted earnings per share was down by $0.02 per share quarter-over-quarter due to lower net income and a higher number of diluted shares in the first quarter of 2010.
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