Fiserv, Inc. reported mixed first-quarter 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.17 beat the consensus mark by 3.5% and increased 18.2% year over year. Adjusted revenues of $3.56 billion missed the consensus estimate by 0.1%.
Internal revenue growth was 4% in the reported quarter, with 8% growth in the Acceptance segment and 2% growth in both the Fintech and Payments segments.
So far this year, shares of Fiserv have gained 11.2% compared with 3.9% surge of the industry it belongs to and 12.2% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.39 billion, down 0.3% year over year. Adjusted revenues of $1.39 billion grew 4.6% year over year.
Revenues at the Payments and Network segment increased 1.4% year over year to $1.41 billion. Adjusted revenues of $1.41 billion grew 1.1% year over year.
Revenues at the Financial Technology segment increased 2.5% year over year to $736 million.
Revenues at the Total processing and services segment decreased 0.7% year over year to $3.05 billion while product revenues grew 1% year over year to $701 million.
Operating Results
Adjusted operating income of $1.12 billion was up 15.3% from the year-ago quarter. Adjusted operating margin of 31.4% grew 360 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $387 million, up 36.7% year over year. Adjusted operating margin grew 650 bps year over year to 27.7%.
Adjusted operating income at the Payments and Network segment was $585 million, up 1.7% year over year. Adjusted operating margin improved 20 bps year over year to 41.4%.
Operating income at the Financial Technology segment totaled $246 million, up 20.6% year over year. Operating margin of 33.4% improved 510 bps.
Balance Sheet and Cash Flow
Fiserv exited first-quarter 2021 with cash and cash equivalents of $831 million compared with $906 million at the end of the prior quarter. Long-term debt was $20.8 billion compared with $20.3 billion at the end of the prior quarter.
The company generated $952 million of net cash from operating activities in the reported quarter. Free cash flow was $821 million. Capital expenditures were $234 million.
The company repurchased 5.2 million shares for $612 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. The company now expects internal revenue growth of 9% to 12% compared with the prior guidance of 8% to 12%.
Adjusted earnings per share are now anticipated in the range of $5.35 to $5.50 compared with the prior guidance of $5.30 and $5.50. The Zacks Consensus Estimate of $5.43 lies within the updated guidance.
Currently, Fiserv carries a Zacks Rank #2 (Buy). 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) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
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Fiserv, Inc. reported mixed first-quarter 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.17 beat the consensus mark by 3.5% and increased 18.2% year over year. Adjusted revenues of $3.56 billion missed the consensus estimate by 0.1%.
Internal revenue growth was 4% in the reported quarter, with 8% growth in the Acceptance segment and 2% growth in both the Fintech and Payments segments.
So far this year, shares of Fiserv have gained 11.2% compared with 3.9% surge of the industry it belongs to and 12.2% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.39 billion, down 0.3% year over year. Adjusted revenues of $1.39 billion grew 4.6% year over year.
Revenues at the Payments and Network segment increased 1.4% year over year to $1.41 billion. Adjusted revenues of $1.41 billion grew 1.1% year over year.
Revenues at the Financial Technology segment increased 2.5% year over year to $736 million.
Revenues at the Total processing and services segment decreased 0.7% year over year to $3.05 billion while product revenues grew 1% year over year to $701 million.
Operating Results
Adjusted operating income of $1.12 billion was up 15.3% from the year-ago quarter. Adjusted operating margin of 31.4% grew 360 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $387 million, up 36.7% year over year. Adjusted operating margin grew 650 bps year over year to 27.7%.
Adjusted operating income at the Payments and Network segment was $585 million, up 1.7% year over year. Adjusted operating margin improved 20 bps year over year to 41.4%.
Operating income at the Financial Technology segment totaled $246 million, up 20.6% year over year. Operating margin of 33.4% improved 510 bps.
Balance Sheet and Cash Flow
Fiserv exited first-quarter 2021 with cash and cash equivalents of $831 million compared with $906 million at the end of the prior quarter. Long-term debt was $20.8 billion compared with $20.3 billion at the end of the prior quarter.
The company generated $952 million of net cash from operating activities in the reported quarter. Free cash flow was $821 million. Capital expenditures were $234 million.
The company repurchased 5.2 million shares for $612 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. The company now expects internal revenue growth of 9% to 12% compared with the prior guidance of 8% to 12%.
Adjusted earnings per share are now anticipated in the range of $5.35 to $5.50 compared with the prior guidance of $5.30 and $5.50. The Zacks Consensus Estimate of $5.43 lies within the updated guidance.
Currently, Fiserv carries a Zacks Rank #2 (Buy). 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) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>
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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