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Fiserv (FISV) Beats on Q3 Earnings & Revenues, Tweaks View
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Fiserv, Inc. reported solid third-quarter 2021 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of $1.47 beat the consensus mark by 2.1% and increased 22.5% year over year. Adjusted revenues of $3.96 billion beat the consensus estimate by 0.03% and increased 10.4% year over year.
Internal revenue growth was 10% in the reported quarter, led by 18% growth in the Acceptance segment, 4% growth in the Fintech segment and 6% growth in the Payments segment.
So far this year, shares of Fiserv have declined 3.5% against 14% loss of the industry it belongs. The Zacks S&P 500 composite grew 22.6% in the same time frame.
Image Source: Zacks Investment Research
Let’s check out the numbers in detail:
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.72 billion, up 18% year over year. Adjusted revenues of $1.72 billion grew 17.9% year over year.
Revenues at the Payments and Network segment increased 6.1% year over year to $1.47 billion. Adjusted revenues of $1.48 billion grew 5.9% year over year.
Revenues at the Financial Technology segment increased 4.7% year over year to $761 million.
Revenues at the Total processing and services segment increased 8.1% year over year to $3.41 billion while product revenues grew 19.4% year over year to $756 million.
Operating Results
Adjusted operating income of $1.31 billion was up 41.2% from the year-ago quarter. Adjusted operating margin of 34.2% grew 130 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $552 million, up 29.9% year over year. Adjusted operating margin grew to 32.2% from 29.2% in the year-ago quarter.
Adjusted operating income at the Payments and Network segment was $650 million, up 6.9% year over year. Adjusted operating margin grew to 44% from 43.5% in the year-ago quarter.
Operating income at the Financial Technology segment totaled $275 million, up 3.8% year over year. Operating margin fell to 36% from 36.4% in the year-ago quarter.
Fiserv exited third-quarter 2021 with cash and cash equivalents of $933 million compared with $841 million at the end of the prior quarter. Long-term debt was $20.5 billion compared with $20.4 billion at the end of the prior quarter.
The company generated $678 million of net cash from operating activities in the reported quarter. Free cash flow was $572 million. Capital expenditures were $320 million.
The company repurchased 3.2 million shares for $365 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. Adjusted earnings per share are now anticipated in the range of $5.55 to $5.60 compared with the prior guidance of $5.50 and $5.60. The Zacks Consensus Estimate of $5.56 lies within the updated guidance.
The company now expects internal revenue growth of 11% compared with the prior guidance of 10% to 12%.
Equifax’s (EFX - Free Report) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year on a reported basis and 14% on a local-currency basis.
IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and improved 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year on a reported basis and 21.1% on constant-currency basis.
Omnicom’s (OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.
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Fiserv (FISV) Beats on Q3 Earnings & Revenues, Tweaks View
Fiserv, Inc. reported solid third-quarter 2021 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of $1.47 beat the consensus mark by 2.1% and increased 22.5% year over year. Adjusted revenues of $3.96 billion beat the consensus estimate by 0.03% and increased 10.4% year over year.
Internal revenue growth was 10% in the reported quarter, led by 18% growth in the Acceptance segment, 4% growth in the Fintech segment and 6% growth in the Payments segment.
So far this year, shares of Fiserv have declined 3.5% against 14% loss of the industry it belongs. The Zacks S&P 500 composite grew 22.6% in the same time frame.
Let’s check out the numbers in detail:
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.72 billion, up 18% year over year. Adjusted revenues of $1.72 billion grew 17.9% year over year.
Revenues at the Payments and Network segment increased 6.1% year over year to $1.47 billion. Adjusted revenues of $1.48 billion grew 5.9% year over year.
Revenues at the Financial Technology segment increased 4.7% year over year to $761 million.
Revenues at the Total processing and services segment increased 8.1% year over year to $3.41 billion while product revenues grew 19.4% year over year to $756 million.
Operating Results
Adjusted operating income of $1.31 billion was up 41.2% from the year-ago quarter. Adjusted operating margin of 34.2% grew 130 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $552 million, up 29.9% year over year. Adjusted operating margin grew to 32.2% from 29.2% in the year-ago quarter.
Adjusted operating income at the Payments and Network segment was $650 million, up 6.9% year over year. Adjusted operating margin grew to 44% from 43.5% in the year-ago quarter.
Operating income at the Financial Technology segment totaled $275 million, up 3.8% year over year. Operating margin fell to 36% from 36.4% in the year-ago quarter.
Fiserv, Inc. Price, Consensus and EPS Surprise
Fiserv, Inc. price-consensus-eps-surprise-chart | Fiserv, Inc. Quote
Balance Sheet and Cash Flow
Fiserv exited third-quarter 2021 with cash and cash equivalents of $933 million compared with $841 million at the end of the prior quarter. Long-term debt was $20.5 billion compared with $20.4 billion at the end of the prior quarter.
The company generated $678 million of net cash from operating activities in the reported quarter. Free cash flow was $572 million. Capital expenditures were $320 million.
The company repurchased 3.2 million shares for $365 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. Adjusted earnings per share are now anticipated in the range of $5.55 to $5.60 compared with the prior guidance of $5.50 and $5.60. The Zacks Consensus Estimate of $5.56 lies within the updated guidance.
The company now expects internal revenue growth of 11% compared with the prior guidance of 10% to 12%.
Currently, Fiserv carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s (EFX - Free Report) third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year on a reported basis and 14% on a local-currency basis.
IQVIA’s (IQV - Free Report) third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and improved 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year on a reported basis and 21.1% on constant-currency basis.
Omnicom’s (OMC - Free Report) third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.