WEX Inc. (WEX - Free Report) delivered better-than-expected third-quarter 2023 results.
Nonetheless, the results failed to impress investors as there has not been any major price change since the earnings release on Oct 26.
Adjusted earnings (excluding $3.63 from non-recurring items) of $4.05 per share surpassed the Zacks Consensus Estimate by 7.4% and improved 15.4% year over year. Total revenues of $651.4 million outpaced the consensus estimate by 1.6% and increased 5.7% year over year.
Quarterly Details
Mobility revenues decreased 7% year over year to $350 million, missing our estimate of $353 million. Corporate Payments revenues of $135.2 million were up 19% year over year, which beat our prediction of $123 million. Benefits revenues of $166.1 million registered 34% year-over-year growth and surpassed our projection of $161.8 million.
Total volume across the company came in at $61.9 billion, up 7.6% year over year. The average number of vehicles serviced was around 19.1 million, up 4% from a year ago. Mobility payment processing transactions were down marginally year over year to $144.6 million.
Corporate Payments purchase volume jumped 35% year over year to $27.9 billion. Benefits average number of Software-as-a-Service accounts were up 9% to 19.9 million year over year.
Adjusted operating income climbed 12.9% to $272.2 million from the year-ago quarter’s $241.2 million. The adjusted operating income margin was 41.8%, down 270 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash equivalent balance of $957.8 million compared with $901.4 million at the prior-quarter end. Long-term debt was $2.65 billion compared with $2.5 billion at the end of the previous quarter.
Guidance
For the fourth quarter of 2023, WEX anticipates revenues in the range of $650-$660 million, the midpoint ($655 million) of which is lower than the current Zacks Consensus Estimate of $655.6 million.
Adjusted net income is expected to be between $3.65 per share and $3.75 per share. The midpoint ($3.70) of the guided range is in line with the Zacks Consensus Estimate.
For 2023, revenues are now forecast to be between $2.53 billion and $2.54 billion compared with the previous expectation of $2.50 billion and $2.52 billion. The midpoint is pegged at $2.535 billion, slightly higher than the Zacks Consensus Estimate of $2.53 billion.
Adjusted net income is now expected to be between $14.64 per share and $14.74 per share compared with the prior anticipated range of $14.15-$14.35 per share. The raised range is above the Zacks Consensus Estimate of $14.45.
Currently, WEX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots of Some Service Providers
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis. Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from the year-ago figure.
EFX’s total revenues of $1.32 billion missed the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings per share of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and jumped 8.2% year over year.
FI’s organic revenue growth was 12% in the quarter. This was driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
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WEX Inc. (WEX - Free Report) delivered better-than-expected third-quarter 2023 results.
Nonetheless, the results failed to impress investors as there has not been any major price change since the earnings release on Oct 26.
Adjusted earnings (excluding $3.63 from non-recurring items) of $4.05 per share surpassed the Zacks Consensus Estimate by 7.4% and improved 15.4% year over year. Total revenues of $651.4 million outpaced the consensus estimate by 1.6% and increased 5.7% year over year.
Quarterly Details
Mobility revenues decreased 7% year over year to $350 million, missing our estimate of $353 million. Corporate Payments revenues of $135.2 million were up 19% year over year, which beat our prediction of $123 million. Benefits revenues of $166.1 million registered 34% year-over-year growth and surpassed our projection of $161.8 million.
Total volume across the company came in at $61.9 billion, up 7.6% year over year. The average number of vehicles serviced was around 19.1 million, up 4% from a year ago. Mobility payment processing transactions were down marginally year over year to $144.6 million.
Corporate Payments purchase volume jumped 35% year over year to $27.9 billion. Benefits average number of Software-as-a-Service accounts were up 9% to 19.9 million year over year.
Adjusted operating income climbed 12.9% to $272.2 million from the year-ago quarter’s $241.2 million. The adjusted operating income margin was 41.8%, down 270 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash equivalent balance of $957.8 million compared with $901.4 million at the prior-quarter end. Long-term debt was $2.65 billion compared with $2.5 billion at the end of the previous quarter.
Guidance
For the fourth quarter of 2023, WEX anticipates revenues in the range of $650-$660 million, the midpoint ($655 million) of which is lower than the current Zacks Consensus Estimate of $655.6 million.
Adjusted net income is expected to be between $3.65 per share and $3.75 per share. The midpoint ($3.70) of the guided range is in line with the Zacks Consensus Estimate.
For 2023, revenues are now forecast to be between $2.53 billion and $2.54 billion compared with the previous expectation of $2.50 billion and $2.52 billion. The midpoint is pegged at $2.535 billion, slightly higher than the Zacks Consensus Estimate of $2.53 billion.
Adjusted net income is now expected to be between $14.64 per share and $14.74 per share compared with the prior anticipated range of $14.15-$14.35 per share. The raised range is above the Zacks Consensus Estimate of $14.45.
Currently, WEX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots of Some Service Providers
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis. Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from the year-ago figure.
EFX’s total revenues of $1.32 billion missed the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings per share of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and jumped 8.2% year over year.
FI’s organic revenue growth was 12% in the quarter. This was driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
Research Chief 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.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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