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Fiserv (FISV) Falls Short of Q2 Earnings & Revenue Estimates
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Fiserv, Inc. reported disappointing second-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate.
Adjusted earnings per share of 93 cents fell below the consensus mark by a penny. Adjusted revenues of $3.22 billion missed the consensus estimate by 1.8%.
Internal revenues declined 7% in the reported quarter, with declines of 15% in the Merchant Acceptance segment, 1% in the Financial Technology segment and 3% in the Payments and Network segment.
So far this year, shares of Fiserv have lost 14.2% against 1.1% growth of the industry it belongs to and 2.6% increase 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 $1.22 billion. Adjusted revenues of $1.17 billion fell 20.4% year over year.
Revenues at the Payments and Network segment increased 99% year over year to $1.32 billion. Adjusted revenues of $1.33 billion declined 4.5% year over year.
Revenues at the Financial Technology segment decreased 2.3% year over year to $714 million.
Revenues at Total processing and services segment increased more than 100% year over year to $2.89 billion while product revenues grew more than 100% year over year to $575 million.
Operating Results
Adjusted operating income of $927 million was down 14.4% from the year-ago quarter. Adjusted operating margin of 28.8% fell 90 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $223 million, down 46.9% year over year. Adjusted operating margin declined 950 bps year over year to 19.1%.
Adjusted operating income at the Payments and Network segment was $558 million, up 0.5% year over year. Adjusted operating margin improved 220 bps year over year to 42.8%.
Operating income at the Financial Technology segment totaled $252 million, up 14% year over year. Operating margin of 35.4% improved 520 bps.
Fiserv exited second-quarter 2020 with cash and cash equivalents of $869 million compared with $896 million at the end of the prior quarter. Long-term debt was $21.5 billion compared with $21.6 billion at the end of the prior quarter.
The company generated $1.03 billion of net cash from operating activities in the reported quarter. Free cash flow was $895 million. Capital expenditures were $242 million. Fiserv repurchased 5.7 million shares for $550 million in the reported quarter.
2020 Guidance
Fiserv expects full-year 2020 adjusted earnings per share to register nearly 10% growth.
The company is hopeful of delivering its 35th consecutive year of double-digit adjusted earnings per share growth in 2020 and remains well-positioned for 2021, considering the improvement in performance trends across the globe.
Equifax (EFX - Free Report) reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.
IQVIA Holdings (IQV - Free Report) reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.
Robert Half (RHI - Free Report) reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.
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Fiserv (FISV) Falls Short of Q2 Earnings & Revenue Estimates
Fiserv, Inc. reported disappointing second-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate.
Adjusted earnings per share of 93 cents fell below the consensus mark by a penny. Adjusted revenues of $3.22 billion missed the consensus estimate by 1.8%.
Internal revenues declined 7% in the reported quarter, with declines of 15% in the Merchant Acceptance segment, 1% in the Financial Technology segment and 3% in the Payments and Network segment.
So far this year, shares of Fiserv have lost 14.2% against 1.1% growth of the industry it belongs to and 2.6% increase 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 $1.22 billion. Adjusted revenues of $1.17 billion fell 20.4% year over year.
Revenues at the Payments and Network segment increased 99% year over year to $1.32 billion. Adjusted revenues of $1.33 billion declined 4.5% year over year.
Revenues at the Financial Technology segment decreased 2.3% year over year to $714 million.
Revenues at Total processing and services segment increased more than 100% year over year to $2.89 billion while product revenues grew more than 100% year over year to $575 million.
Operating Results
Adjusted operating income of $927 million was down 14.4% from the year-ago quarter. Adjusted operating margin of 28.8% fell 90 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $223 million, down 46.9% year over year. Adjusted operating margin declined 950 bps year over year to 19.1%.
Adjusted operating income at the Payments and Network segment was $558 million, up 0.5% year over year. Adjusted operating margin improved 220 bps year over year to 42.8%.
Operating income at the Financial Technology segment totaled $252 million, up 14% year over year. Operating margin of 35.4% improved 520 bps.
Fiserv, Inc. Price, Consensus and EPS Surprise
Fiserv, Inc. price-consensus-eps-surprise-chart | Fiserv, Inc. Quote
Balance Sheet and Cash Flow
Fiserv exited second-quarter 2020 with cash and cash equivalents of $869 million compared with $896 million at the end of the prior quarter. Long-term debt was $21.5 billion compared with $21.6 billion at the end of the prior quarter.
The company generated $1.03 billion of net cash from operating activities in the reported quarter. Free cash flow was $895 million. Capital expenditures were $242 million. Fiserv repurchased 5.7 million shares for $550 million in the reported quarter.
2020 Guidance
Fiserv expects full-year 2020 adjusted earnings per share to register nearly 10% growth.
The company is hopeful of delivering its 35th consecutive year of double-digit adjusted earnings per share growth in 2020 and remains well-positioned for 2021, considering the improvement in performance trends across the globe.
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 (EFX - Free Report) reported better-than-expected second-quarter 2020 adjusted earnings of $1.60 per share, whichbeat the Zacks Consensus Estimate by 22.1% and improved 14.3% on a year-over-year basis. The reported figure exceeded the guided range of 78-88 cents.
IQVIA Holdings (IQV - Free Report) reported second-quarter 2020 adjusted earnings per share of $1.18, which beat the consensus mark by 12.4% but decreased 22.9% on a year-over-year basis. The reported figure exceeded the guided range of $1.00-$1.09.
Robert Half (RHI - Free Report) reported second-quarter 2020 earnings of 41 cents per share that beat the consensus mark by 17% but were down 58% year over year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>