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FLEETCOR (FLT) Q3 Earnings Beat Estimates, Revenues Lag

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FLEETCOR Technologies, Inc. reported mixed third-quarter 2020 results wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings of $2.80 per share outpaced the consensus estimate by 5.3% but decreased 10% year over year. Revenues of $585.3 million missed the consensus mark by 0.1% and decreased 14% year over year on a reported basis and 12% on a pro-forma and macro-adjusted basis.

Quarterly volumes improved sequentially in each line of business, backed by rising existing client usage. New sales performance rose to 80%. Client retention and credit trends were also very encouraging in the reported quarter.

So far this year, shares of FLEETCOR have lost 16.6% compared with 1.8% decline of the industry it belongs to and 7.5% increase of the Zacks S&P 500 composite.

 

Revenues in Detail

Segment wise, revenues from North America came in at $383.83 million, down 13.3% year over year. Internationally, revenues of $121.86 million decreased 7.5% year over year. Revenues from Brazil declined 25.3% to $79.59 million.

Product-category wise, fuel revenues of $255.1 million went down 14% year over year on a reported basis and 11% on a pro-forma and macro-adjusted basis.

Corporate Payments revenues of $106.5 million decreased 11% year over year on a reported basis as well as on a pro-forma and macro-adjusted basis.

Tolls revenues of $67.6 million declined 24% year over year on a reported basis but improved 3% on a pro-forma and macro-adjusted basis.

Lodging revenues of $52.9 million decreased 6% year over year on a reported basis and 32% on a pro-forma and macro-adjusted basis.

Gift revenues of $39.1 million decreased 19% year over year on a reported as well as a pro-forma and macro-adjusted basis.

Other revenues of $64.1 million decreased 11% year over year on a reported and 9% on a pro-forma and macro-adjusted basis.

Operating Results

Operating income decreased 19.6% from the prior-year quarter to $264.53 million. Operating income margin declined to 45.2% from 48.3% in the prior-year quarter.

Balance Sheet & Cash Flow

FLEETCOR exited third-quarter 2020 with cash, cash equivalents and restricted cash of $1.37 billion compared with $1.19 billion at the end of the prior quarter.

The company generated $412.53 million of net cash from operating activities. Capital expenditures totaled $18.15 million.

In the reported quarter, FLEETCOR repurchased shares worth $231.05 million. The company’s board of directors approved an increase in the previously announced share-repurchase program by an additional $1 billion. Inclusive of the raised share buyback approval, the company may repurchase shares worth $1.056 billion any time prior to Feb 1, 2023.

2020 Guidance

Considering the uncertainty in market recoveries due to the coronavirus outbreak, FLEETCOR has not updated its full-year 2020 guidance.

The company is hopeful of lowering its expenses 10%-12% from last year in order to balance current profitability with investment for future growth

Currently, FLEETCOR carries a Zacks Rank #4 (Sell).

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 third-quarter 2020 results, with adjusted earnings of $1.87 per share beating the Zacks Consensus Estimate by 16.2% and improving 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.

The Interpublic Group of Companies (IPG - Free Report) reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and improved 8.2% on a year-over-year basis.

IQVIA Holdings (IQV - Free Report) reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and improved 1.9% on a year-over-year basis. The reported figure was above the guided range of $1.47-$1.55.

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