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WEX Declines 4% Despite Beating on Q1 Earnings and Revenues

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Shares of the WEX Inc. (WEX - Free Report) declined 4.1% since its first-quarter 2021 results on Apr 29, despite beating on earnings and revenues.

Adjusted earnings of $1.79 per share surpassed the Zacks Consensus Estimate by 11.9% but slightly declined year over year. Total revenues of $410.8 million surpassed the consensus mark by a slight margin but declined 4.8% year over year.

Notably, WEX’s shares have increased 61.8% in the past year compared with 13.1% growth of the industry it belongs to.

Revenues by Segment

Fleet Solutions revenues declined 2% year over year to $243.8 million. The downside was primarily due to 6% plunge in finance fee revenues.

Average number of vehicles serviced was 15.8 million, up 4% from the year-ago quarter’s figure. Total fuel transactions processed fell 3% from the year-ago quarter’s tally to 146.4 million. Payment-processing transactions were down 3% to 118.4 million. U.S. retail fuel price increased 5.8% to $2.72 per gallon.

Travel and Corporate Solutions revenues of $70.6 million were down 16% year over year. The downtick was caused by decline in revenues from travel-related customers. Purchase volume plunged 24% to $6.1 billion.

Health and Employee Benefit Solutions revenues of $96.3 million declined 1% year over year on 62% decline in finance fee revenues. The average number of Software-as-a-Service (SaaS) accounts in the United States increased 7% year over year to 15.5 million.

Operating Results

Adjusted operating income was slightly up from the prior-year quarter’s figure to $139.6 million. Adjusted operating income margin increased to 34% from the year-ago quarter’s level 32.3%.

Balance Sheet

WEX exited the quarter with cash and cash equivalents balance of $561.2 million compared with $852 million witnessed at the end of the prior quarter. Long-term debt was $2.5 billion, compared with $2.9 billion at the end of the previous quarter.

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

Equifax’s (EFX - Free Report) first-quarter 2021 adjusted earnings of $1.97 per share beat the Zacks Consensus Estimate by 29.6% and increased on a year-over-year basis. Revenues of $1.21 billion outpaced the consensus mark by 7.9% and rose 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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