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Fiserv's (FISV) Q4 Earnings Top Estimates, Revenues Miss
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Fiserv, Inc. reported mixed fourth-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.30 beat the consensus mark by 0.8% and increased year over year. Adjusted revenues of $3.62 billion missed the consensus estimate by 3.6%.
Internal revenue growth was 1% in the reported quarter, with 3% growth in the Acceptance segment and 1% decline in both the Fintech and Payments segments
Over the past year, shares of Fiserv have lost 7.9% compared with 3.4% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite has gained 19%.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.44 billion, down 7.4% year over year. Adjusted revenues of $1.44 billion fell 1.3% year over year.
Revenues at the Payments and Network segment decreased 2.2% year over year to $1.41 billion. Adjusted revenues of $1.42 billion declined 2.1% year over year.
Revenues at the Financial Technology segment decreased 1.1% year over year to $742 million.
Revenues at Total processing and services segment increased 7.4% year over year to $3.09 billion while product revenues grew 4.9% year over year to $735 million.
Operating Results
Adjusted operating income of $1.18 billion was up 9.5% from the year-ago quarter. Adjusted operating margin of 35.6% grew 420 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $443 million, up 8.3% year over year. Adjusted operating margin grew 280 bps year over year to 30.7%.
Adjusted operating income at the Payments and Network segment was $660 million, up 4.8% year over year. Adjusted operating margin improved 300 bps year over year to 46.4%.
Operating income at the Financial Technology segment totaled $271 million, up 13.9% year over year. Operating margin of 36.5% improved 490 bps.
Fiserv exited fourth-quarter 2020 with cash and cash equivalents of $906 million compared with $937 million at the end of the prior quarter. Long-term debt was $20.3 billion compared with $20.9 billion at the end of the prior quarter.
The company generated $1.19 billion of net cash from operating activities in the reported quarter. Free cash flow was $1.05 billion. Capital expenditures were $211 million.
The company repurchased 1.8 million shares for $200 million in the reported quarter. Also, the company's board of directors approved a new 60 million share repurchase authorization during the reported quarter.
2021 Guidance
Fiserv expects full-year 2021 internal revenue growth to be 8% to 12%. Adjusted earnings per share are anticipated between $5.30 and $5.50, indicating growth of 20% to 24%. The Zacks Consensus Estimate of $5.37 lies within the guidance.
The guidance does not include any significant extension of coronavirus impacts beyond the first half of 2021.
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
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Fiserv's (FISV) Q4 Earnings Top Estimates, Revenues Miss
Fiserv, Inc. reported mixed fourth-quarter 2020 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.30 beat the consensus mark by 0.8% and increased year over year. Adjusted revenues of $3.62 billion missed the consensus estimate by 3.6%.
Internal revenue growth was 1% in the reported quarter, with 3% growth in the Acceptance segment and 1% decline in both the Fintech and Payments segments
Over the past year, shares of Fiserv have lost 7.9% compared with 3.4% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite has gained 19%.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.44 billion, down 7.4% year over year. Adjusted revenues of $1.44 billion fell 1.3% year over year.
Revenues at the Payments and Network segment decreased 2.2% year over year to $1.41 billion. Adjusted revenues of $1.42 billion declined 2.1% year over year.
Revenues at the Financial Technology segment decreased 1.1% year over year to $742 million.
Revenues at Total processing and services segment increased 7.4% year over year to $3.09 billion while product revenues grew 4.9% year over year to $735 million.
Operating Results
Adjusted operating income of $1.18 billion was up 9.5% from the year-ago quarter. Adjusted operating margin of 35.6% grew 420 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $443 million, up 8.3% year over year. Adjusted operating margin grew 280 bps year over year to 30.7%.
Adjusted operating income at the Payments and Network segment was $660 million, up 4.8% year over year. Adjusted operating margin improved 300 bps year over year to 46.4%.
Operating income at the Financial Technology segment totaled $271 million, up 13.9% year over year. Operating margin of 36.5% improved 490 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 fourth-quarter 2020 with cash and cash equivalents of $906 million compared with $937 million at the end of the prior quarter. Long-term debt was $20.3 billion compared with $20.9 billion at the end of the prior quarter.
The company generated $1.19 billion of net cash from operating activities in the reported quarter. Free cash flow was $1.05 billion. Capital expenditures were $211 million.
The company repurchased 1.8 million shares for $200 million in the reported quarter. Also, the company's board of directors approved a new 60 million share repurchase authorization during the reported quarter.
2021 Guidance
Fiserv expects full-year 2021 internal revenue growth to be 8% to 12%. Adjusted earnings per share are anticipated between $5.30 and $5.50, indicating growth of 20% to 24%. The Zacks Consensus Estimate of $5.37 lies within the guidance.
The guidance does not include any significant extension of coronavirus impacts beyond the first half of 2021.
Currently, Fiserv 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 Business Services Companies
Rollins’ (ROL - Free Report) fourth-quarter 2020 adjusted earnings of 13 cents per share came ahead of the consensus estimate as well as the year-ago figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and improved 6% year over year.
IHS Markit’s fourth-quarter fiscal 2020 adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate by 7.5% and increased 11% on a year-over-year basis. Total revenues came in at $1.11 billion, marginally missing the consensus mark and declining 1% from the year-ago quarter on a reported basis.
Automatic Data Processing’s (ADP - Free Report) second-quarter fiscal 2021 adjusted earnings per share of $1.52 beat the consensus mark by 17.8% and were flat year over year. Total revenues of $3.69 billion beat the consensus mark by 3.2% and improved 0.7% year over year.
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Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.9% per year.
These 7 were selected because of their superior potential for immediate breakout.
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