Fiserv, Inc. reported mixed fourth-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.30 beat the consensus mark by 0.8% and increased year over year. Adjusted revenues of $3.62 billion missed the consensus estimate by 3.6%.
Internal revenue growth was 1% in the reported quarter, with 3% growth in the Acceptance segment and 1% decline in both the Fintech and Payments segments
Over the past year, shares of Fiserv have lost 7.9% compared with 3.4% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite has gained 19%.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.44 billion, down 7.4% year over year. Adjusted revenues of $1.44 billion fell 1.3% year over year.
Revenues at the Payments and Network segment decreased 2.2% year over year to $1.41 billion. Adjusted revenues of $1.42 billion declined 2.1% year over year.
Revenues at the Financial Technology segment decreased 1.1% year over year to $742 million.
Revenues at Total processing and services segment increased 7.4% year over year to $3.09 billion while product revenues grew 4.9% year over year to $735 million.
Operating Results
Adjusted operating income of $1.18 billion was up 9.5% from the year-ago quarter. Adjusted operating margin of 35.6% grew 420 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $443 million, up 8.3% year over year. Adjusted operating margin grew 280 bps year over year to 30.7%.
Adjusted operating income at the Payments and Network segment was $660 million, up 4.8% year over year. Adjusted operating margin improved 300 bps year over year to 46.4%.
Operating income at the Financial Technology segment totaled $271 million, up 13.9% year over year. Operating margin of 36.5% improved 490 bps.
Balance Sheet and Cash Flow
Fiserv exited fourth-quarter 2020 with cash and cash equivalents of $906 million compared with $937 million at the end of the prior quarter. Long-term debt was $20.3 billion compared with $20.9 billion at the end of the prior quarter.
The company generated $1.19 billion of net cash from operating activities in the reported quarter. Free cash flow was $1.05 billion. Capital expenditures were $211 million.
The company repurchased 1.8 million shares for $200 million in the reported quarter. Also, the company's board of directors approved a new 60 million share repurchase authorization during the reported quarter.
2021 Guidance
Fiserv expects full-year 2021 internal revenue growth to be 8% to 12%. Adjusted earnings per share are anticipated between $5.30 and $5.50, indicating growth of 20% to 24%. The Zacks Consensus Estimate of $5.37 lies within the guidance.
The guidance does not include any significant extension of coronavirus impacts beyond the first half of 2021.
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
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
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Fiserv, Inc. reported mixed fourth-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.30 beat the consensus mark by 0.8% and increased year over year. Adjusted revenues of $3.62 billion missed the consensus estimate by 3.6%.
Internal revenue growth was 1% in the reported quarter, with 3% growth in the Acceptance segment and 1% decline in both the Fintech and Payments segments
Over the past year, shares of Fiserv have lost 7.9% compared with 3.4% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite has gained 19%.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.44 billion, down 7.4% year over year. Adjusted revenues of $1.44 billion fell 1.3% year over year.
Revenues at the Payments and Network segment decreased 2.2% year over year to $1.41 billion. Adjusted revenues of $1.42 billion declined 2.1% year over year.
Revenues at the Financial Technology segment decreased 1.1% year over year to $742 million.
Revenues at Total processing and services segment increased 7.4% year over year to $3.09 billion while product revenues grew 4.9% year over year to $735 million.
Operating Results
Adjusted operating income of $1.18 billion was up 9.5% from the year-ago quarter. Adjusted operating margin of 35.6% grew 420 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $443 million, up 8.3% year over year. Adjusted operating margin grew 280 bps year over year to 30.7%.
Adjusted operating income at the Payments and Network segment was $660 million, up 4.8% year over year. Adjusted operating margin improved 300 bps year over year to 46.4%.
Operating income at the Financial Technology segment totaled $271 million, up 13.9% year over year. Operating margin of 36.5% improved 490 bps.
Balance Sheet and Cash Flow
Fiserv exited fourth-quarter 2020 with cash and cash equivalents of $906 million compared with $937 million at the end of the prior quarter. Long-term debt was $20.3 billion compared with $20.9 billion at the end of the prior quarter.
The company generated $1.19 billion of net cash from operating activities in the reported quarter. Free cash flow was $1.05 billion. Capital expenditures were $211 million.
The company repurchased 1.8 million shares for $200 million in the reported quarter. Also, the company's board of directors approved a new 60 million share repurchase authorization during the reported quarter.
2021 Guidance
Fiserv expects full-year 2021 internal revenue growth to be 8% to 12%. Adjusted earnings per share are anticipated between $5.30 and $5.50, indicating growth of 20% to 24%. The Zacks Consensus Estimate of $5.37 lies within the guidance.
The guidance does not include any significant extension of coronavirus impacts beyond the first half of 2021.
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
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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