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WEX Misses Earnings Estimates in Q4, Stock Declines 9.4%
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WEX Inc. (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.
Operating Results
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%.
Balance Sheet
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.
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 quarter’s figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and increased 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’s 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 moved up 0.7% year over year.
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WEX Misses Earnings Estimates in Q4, Stock Declines 9.4%
WEX Inc. (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.
WEX Inc. Price, Consensus and EPS Surprise
WEX Inc. price-consensus-eps-surprise-chart | WEX Inc. Quote
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.
Operating Results
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%.
Balance Sheet
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).
You can see the complete list of today’s Zacks #1(Strong Buy) Rank 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 quarter’s figure by 18.2%. Revenues of $536.3 million beat the consensus mark by 1.7% and increased 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’s 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 moved up 0.7% year over year.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>