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Fidelity National Information Services’ (FIS - Free Report) third-quarter 2020 adjusted earnings per share from continuing operations were $1.42, surpassing the Zacks Consensus Estimate by a penny. The bottom line, however, compared unfavorably with the year-ago quarter figure of $1.43.
Strong liquidity position and expanding margin were the key tailwinds. Also, a rise in organic revenues was a positive. However, higher expenses posed a key concern.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $20 million or 3 cents per share compared with $154 million or 29 cents per share in the prior-year quarter.
Organic Revenues Rise, Expenses Flare Up
GAAP revenues in the quarter were $3.2 billion, up 13.3% year over year. The upside was mainly driven by the acquisition of Worldpay. Also, the figure matched the Zacks Consensus Estimate.
Organic revenues increased nearly 1% in the quarter, primarily due to reduced consumer spending trends caused by impact of the COVID-19 pandemic.
Selling, general and administrative expenses were $862 million, up 13.9% from $757 million in the year-ago quarter.
Segment wise, Merchant Solutions’ GAAP revenues grew to $1.02 billion from $705 million in the year-ago quarter. Revenues from Banking Solutions rose 4% to $1.51 million. Capital Market Solutions’ revenues jumped 2% to $626 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased to $1.36 billion from $1.19 billion in the year-ago quarter. Adjusted EBITDA margin expanded 30 basis points to 42.5%.
Balance Sheet & Cash Flow
As of Sep 30, 2020, cash and cash equivalents were $1.83 billion compared with $1.15 billion as of Dec 31, 2019. Debt outstanding was $20.2 billion.
In the third quarter, net cash provided by operations was $1.41 billion and the company reported free cash flow of $866 million.
The company paid out dividends worth $217 million in the reported quarter.
Our Viewpoint
Fidelity’s dominant position in financial and payments solutions business, backed by a robust product portfolio, keeps us encouraged. Notably, the merger of Fidelity and Worldpay will provide clients of both organizations access to a wider portfolio of digital assets for accelerating revenue growth.
However, increasing consolidation in the banking sector, a challenging environment for the Payments Solutions business and an uncertain regulatory environment are key headwinds.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
BOK Financial (BOKF - Free Report) reported an earnings surprise of 45% for third-quarter 2020. Earnings per share of $2.19 cents surpassed the Zacks Consensus Estimate of $1.51. Further, the bottom line compares favorably with the prior-year quarter’s $2.00.
Huntington Bancshares’ (HBAN - Free Report) third-quarter 2020 earnings per share of 27 cents outpaced the Zacks Consensus Estimate of 25 cents on impressive top-line strength. The bottom-line figure, however, comes in 21% lower than the prior-year quarter reported tally.
UMB Financial (UMBF - Free Report) reported third-quarter 2020 net operating income of $1.59 per share, surpassing the Zacks Consensus Estimate of $1.01. The reported figure also compares favorably with the prior-year quarter’s earnings of $1.27.
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Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Fidelity (FIS) Q3 Earnings Beat Estimates, Revenues Rise
Fidelity National Information Services’ (FIS - Free Report) third-quarter 2020 adjusted earnings per share from continuing operations were $1.42, surpassing the Zacks Consensus Estimate by a penny. The bottom line, however, compared unfavorably with the year-ago quarter figure of $1.43.
Strong liquidity position and expanding margin were the key tailwinds. Also, a rise in organic revenues was a positive. However, higher expenses posed a key concern.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $20 million or 3 cents per share compared with $154 million or 29 cents per share in the prior-year quarter.
Organic Revenues Rise, Expenses Flare Up
GAAP revenues in the quarter were $3.2 billion, up 13.3% year over year. The upside was mainly driven by the acquisition of Worldpay. Also, the figure matched the Zacks Consensus Estimate.
Organic revenues increased nearly 1% in the quarter, primarily due to reduced consumer spending trends caused by impact of the COVID-19 pandemic.
Selling, general and administrative expenses were $862 million, up 13.9% from $757 million in the year-ago quarter.
Segment wise, Merchant Solutions’ GAAP revenues grew to $1.02 billion from $705 million in the year-ago quarter. Revenues from Banking Solutions rose 4% to $1.51 million. Capital Market Solutions’ revenues jumped 2% to $626 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased to $1.36 billion from $1.19 billion in the year-ago quarter. Adjusted EBITDA margin expanded 30 basis points to 42.5%.
Balance Sheet & Cash Flow
As of Sep 30, 2020, cash and cash equivalents were $1.83 billion compared with $1.15 billion as of Dec 31, 2019. Debt outstanding was $20.2 billion.
In the third quarter, net cash provided by operations was $1.41 billion and the company reported free cash flow of $866 million.
The company paid out dividends worth $217 million in the reported quarter.
Our Viewpoint
Fidelity’s dominant position in financial and payments solutions business, backed by a robust product portfolio, keeps us encouraged. Notably, the merger of Fidelity and Worldpay will provide clients of both organizations access to a wider portfolio of digital assets for accelerating revenue growth.
However, increasing consolidation in the banking sector, a challenging environment for the Payments Solutions business and an uncertain regulatory environment are key headwinds.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Fidelity National Information Services, Inc. price-consensus-eps-surprise-chart | Fidelity National Information Services, Inc. Quote
Fidelity currently 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 Banks
BOK Financial (BOKF - Free Report) reported an earnings surprise of 45% for third-quarter 2020. Earnings per share of $2.19 cents surpassed the Zacks Consensus Estimate of $1.51. Further, the bottom line compares favorably with the prior-year quarter’s $2.00.
Huntington Bancshares’ (HBAN - Free Report) third-quarter 2020 earnings per share of 27 cents outpaced the Zacks Consensus Estimate of 25 cents on impressive top-line strength. The bottom-line figure, however, comes in 21% lower than the prior-year quarter reported tally.
UMB Financial (UMBF - Free Report) reported third-quarter 2020 net operating income of $1.59 per share, surpassing the Zacks Consensus Estimate of $1.01. The reported figure also compares favorably with the prior-year quarter’s earnings of $1.27.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>