WEX Inc. ( WEX Quick Quote WEX - Free Report) reported mixed fourth-quarter 2020 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. Following discouraging bottom-line results, shares of the company lost 9.4% on Feb 24.
Adjusted earnings of $1.45 per share (excluded $6.75 from non-recurring items) missed the Zacks Consensus Estimate by 0.7% and declined 44.4% year over year. Total revenues of $399 million surpassed the consensus mark by 3.2% and declined 9.3% year over year. The downside was caused by lower average fuel prices and foreign exchange rates.
Notably, WEX’s shares have increased 7.7% in the past year against 6.1% growth of the
industry it belongs to. Revenues by Segment
Fleet Solutions revenues (59% of total revenues) declined 9.7% year over year to $235.4 million. The downside was primarily due to 25% plunge in finance fee revenue.
Average number of vehicles serviced was 15.8 million, up 6% from the year-ago quarter’s figure. Total fuel transactions processed fell 5% from the year-ago quarter’s tally to 147.7 million. Payment processing transactions were down 7% to 118.3 million. U.S. retail fuel price declined 19.3% to $2.26 per gallon.
Travel and Corporate Solutions revenues (18.7%) of $74.7 million were down 21.9% year over year. The downtick was caused by decline in revenues from travel-related customers. Purchase volume plunged 48% to $5 billion.
Health and Employee Benefit Solutions revenues (22.3%) of $88.9 million rose 6.3% year over year, on 13% growth in account servicing revenues and 4% growth in payment processing revenues. The average number of Software-as-a-Service (SaaS) accounts in the United States increased 8% year over year to 14.5 million.
Adjusted operating income fell 37.8% from the prior-year quarter’s figure to $115.1 million. Adjusted operating income margin declined to 28.8% from the year-ago quarter’s level 42%.
WEX exited the quarter with cash and cash equivalents of $852 million compared with $1.5 billion witnessed at the end of the prior quarter. Long-term debt was $2.9 billion, flat sequentially.
Currently, WEX carries a Zacks Rank #2 (Buy).
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