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Fiserv's (FISV) Q1 Earnings Beat, Revenues Miss, View Up
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Fiserv, Inc. reported mixed first-quarter 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.17 beat the consensus mark by 3.5% and increased 18.2% year over year. Adjusted revenues of $3.56 billion missed the consensus estimate by 0.1%.
Internal revenue growth was 4% in the reported quarter, with 8% growth in the Acceptance segment and 2% growth in both the Fintech and Payments segments.
So far this year, shares of Fiserv have gained 11.2% compared with 3.9% surge of the industry it belongs to and 12.2% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.39 billion, down 0.3% year over year. Adjusted revenues of $1.39 billion grew 4.6% year over year.
Revenues at the Payments and Network segment increased 1.4% year over year to $1.41 billion. Adjusted revenues of $1.41 billion grew 1.1% year over year.
Revenues at the Financial Technology segment increased 2.5% year over year to $736 million.
Revenues at the Total processing and services segment decreased 0.7% year over year to $3.05 billion while product revenues grew 1% year over year to $701 million.
Operating Results
Adjusted operating income of $1.12 billion was up 15.3% from the year-ago quarter. Adjusted operating margin of 31.4% grew 360 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $387 million, up 36.7% year over year. Adjusted operating margin grew 650 bps year over year to 27.7%.
Adjusted operating income at the Payments and Network segment was $585 million, up 1.7% year over year. Adjusted operating margin improved 20 bps year over year to 41.4%.
Operating income at the Financial Technology segment totaled $246 million, up 20.6% year over year. Operating margin of 33.4% improved 510 bps.
Fiserv exited first-quarter 2021 with cash and cash equivalents of $831 million compared with $906 million at the end of the prior quarter. Long-term debt was $20.8 billion compared with $20.3 billion at the end of the prior quarter.
The company generated $952 million of net cash from operating activities in the reported quarter. Free cash flow was $821 million. Capital expenditures were $234 million.
The company repurchased 5.2 million shares for $612 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. The company now expects internal revenue growth of 9% to 12% compared with the prior guidance of 8% to 12%.
Adjusted earnings per share are now anticipated in the range of $5.35 to $5.50 compared with the prior guidance of $5.30 and $5.50. The Zacks Consensus Estimate of $5.43 lies within the updated guidance.
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
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Fiserv's (FISV) Q1 Earnings Beat, Revenues Miss, View Up
Fiserv, Inc. reported mixed first-quarter 2021 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
Adjusted earnings per share of $1.17 beat the consensus mark by 3.5% and increased 18.2% year over year. Adjusted revenues of $3.56 billion missed the consensus estimate by 0.1%.
Internal revenue growth was 4% in the reported quarter, with 8% growth in the Acceptance segment and 2% growth in both the Fintech and Payments segments.
So far this year, shares of Fiserv have gained 11.2% compared with 3.9% surge of the industry it belongs to and 12.2% rally of the Zacks S&P 500 composite.
Let’s check out the numbers in detail.
Revenues in Detail
Revenues at the Merchant Acceptance segment came in at $1.39 billion, down 0.3% year over year. Adjusted revenues of $1.39 billion grew 4.6% year over year.
Revenues at the Payments and Network segment increased 1.4% year over year to $1.41 billion. Adjusted revenues of $1.41 billion grew 1.1% year over year.
Revenues at the Financial Technology segment increased 2.5% year over year to $736 million.
Revenues at the Total processing and services segment decreased 0.7% year over year to $3.05 billion while product revenues grew 1% year over year to $701 million.
Operating Results
Adjusted operating income of $1.12 billion was up 15.3% from the year-ago quarter. Adjusted operating margin of 31.4% grew 360 basis points (bps) year over year.
Adjusted operating income at the Merchant Acceptance segment was $387 million, up 36.7% year over year. Adjusted operating margin grew 650 bps year over year to 27.7%.
Adjusted operating income at the Payments and Network segment was $585 million, up 1.7% year over year. Adjusted operating margin improved 20 bps year over year to 41.4%.
Operating income at the Financial Technology segment totaled $246 million, up 20.6% year over year. Operating margin of 33.4% improved 510 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 first-quarter 2021 with cash and cash equivalents of $831 million compared with $906 million at the end of the prior quarter. Long-term debt was $20.8 billion compared with $20.3 billion at the end of the prior quarter.
The company generated $952 million of net cash from operating activities in the reported quarter. Free cash flow was $821 million. Capital expenditures were $234 million.
The company repurchased 5.2 million shares for $612 million in the reported quarter.
2021 Guidance
Fiserv has raised the lower end of its outlook for 2021. The company now expects internal revenue growth of 9% to 12% compared with the prior guidance of 8% to 12%.
Adjusted earnings per share are now anticipated in the range of $5.35 to $5.50 compared with the prior guidance of $5.30 and $5.50. The Zacks Consensus Estimate of $5.43 lies within the updated guidance.
Currently, Fiserv carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and improved on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus estimate by 7.9% and improved 26.6% year over year on a reported basis as well as on a local-currency basis.
Robert Half’s (RHI - Free Report) first-quarter 2021 earnings of 98 cents per share beat the consensus mark by 22.5% and were up 24.1% year over year. Revenues of $1.4 billion surpassed the consensus mark by 3.3% but declined 7.2% year over year on a reported basis and 7.6% on an adjusted basis.
Omnicom’s (OMC - Free Report) first-quarter 2021 adjusted earnings of $1.33 per share beat the consensus mark by 16.7% and increased 11.8% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 3.6% and increased marginally year over year.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
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