Gartner (NYSE:IT) announced first-quarter 2019 results on Monday after the market closed, mustering modest top-line growth in spite of strategic business dispositions over the past year. The research and advisory services company also reaffirmed its full-year outlook.

With shares down around 4% in Tuesday's early trading as of this writing, let's look at how Gartner kicked off the new year.

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Image source: Getty Images.

Gartner results: The raw numbers

Metric

Q1 2019

Q1 2018

Year-Over-Year Growth

GAAP revenue

$970 million

$964 million

0.6%

GAAP net income (loss)

$21 million

($20 million)

N/A

GAAP earnings (loss) per diluted share

$0.23

($0.22)

N/A

Data source: Gartner.  

What happened with Gartner this quarter?

  • Excluding contributions from divested businesses, Gartner's (non-GAAP) revenue grew 8% (or 11% at constant currencies), and earnings declined 19% year over year to $0.58 per share.
  • Gartner didn't provide specific guidance with its last quarterly report in February. So for perspective -- and though we don't usually pay close attention to Wall Street's demands -- these results compared favorably with consensus estimates for lower adjusted earnings of $0.53 per share on revenue of $962 million.
  • By segment on an adjusted basis: 
    • Research revenue grew 8% (or 11% at constant currency) to $825 million,
    • Conferences revenue climbed 13% (17% at constant currency) to $52 million, and
    • Consulting revenue climbed 12% (16% at constant currency) to $93 million.
  • Global business sales (GBS) contract value remained flat at constant currencies at roughly $0.6 billion.
  • Global technology sales (GTS) contract value grew 14% year over year at constant currencies to $2.5 billion.
  • The company generated operating cash flow of $36 million, and free cash flow of $35 million.

What management had to say

CEO Gene Hall stated:

Demand for our services is strong as clients recognize the incredible value of the services we offer. The acceleration we saw last year in global technology sales, our largest and most important business, continued in the first quarter of 2019. Our ongoing investments in our business keep us well positioned for sustained, long-term, double-digit growth.

Check out the latest earnings call transcripts for companies we cover.

Looking forward 

Given its performance in the first quarter, Gartner reiterated its full-year 2019 guidance for revenue of $4.22 billion to $4.315 billion, representing growth of 9% to 11% from 2018. Gartner also continues to expect 2019 adjusted earnings per share of $3.82 to $4.19, or growth of 5% to 15% from last year. 

Some investors might be disappointed, then, that Gartner didn't raise its outlook given its relative outperformance in Q1 -- though it's worth noting the gravity of that beat was small, and Gartner stock had already climbed around 28% year to date on the heels of its solid fourth-quarter report three months ago. With that in mind, I don't think today's pullback should be terribly surprising or concerning for patient, long-term shareholders.