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Fidelity National Information Services’ (FIS - Free Report) second-quarter 2021 adjusted net earnings per share were $1.61, surpassing the Zacks Consensus Estimate of $1.55. Also, the bottom line compared favorably with the year-ago quarter figure of $1.15.
Notable increase in margin and organic revenue growth were positives. Given the robust activity in terms of new sales and an expanding backlog of revenue under contract in the June-end quarter, the company improved its guidance for 2021. However, flaring expenses posed a major concern.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $341 million or 55 cents per share compared with $19 million or 3 cents per share in the prior-year quarter.
Organic Revenues Rise, Expenses Increase
Revenues in the quarter were $3.48 billion, up 17% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $3.39 billion. Organic revenues increased 16% in the quarter on higher growth across all three operating segments.
Segment-wise, Merchant Solutions’ revenues climbed 45% to $1.18 billion. Revenues from Banking Solutions rose 8% to $1.58 million. Capital Market Solutions’ revenues jumped 6% to $630 million.
Selling, general and administrative expenses were $977 million, up 16.3% year over year.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased to $1.52 billion from $1.15 billion in the year-ago quarter. Adjusted EBITDA margin expanded 460 basis points to 43.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents were $1.30 billion compared with $1.96 billion as of Dec 31, 2020. Debt outstanding was $19.4 billion.
In the second quarter, net cash provided by operations was $1 billion. The company reported a free cash flow of $1 billion.
It paid out dividends worth $242 million in the reported quarter and repurchased 2.7 million shares for $400 million.
Guidance
Third Quarter
Fidelity expects GAAP revenues between $3.49 billion and $3.52 billion. The company expects to report earnings per share between 40 cents and 50 cents. Adjusted earnings per share are expected to be $1.66-$1.69.
Full Year
For 2021, GAAP revenues are projected to be between $13.9 billion and $14 billion. The company expects to report earnings per share of $1.20-$1.45. Adjusted earnings per share are expected to be $6.45-$6.60.
Our Viewpoint
Fidelity’s better-than-expected second-quarter results were supported by higher revenue growth across all three operating segments.The company remains well-poised for growth, backed by its attractive core business, with many ongoing initiatives and a broad customer base. Also, higher investments in mobile banking and innovative products are expected to support Fidelity's growth over the long term.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Lazard Ltd (LAZ - Free Report) reported second-quarter 2021 adjusted earnings of $1.28 per share, beating the Zacks Consensus Estimate of 89 cents. The reported figure also reflected 91% year-over-year growth.
Federated Hermes (FHI - Free Report) reported second-quarter 2021 earnings per share of 67 cents, in line with the Zacks Consensus Estimate. The figure, however, compared unfavorably with the prior-year quarter earnings of 80 cents.
Cullen/Frost Bankers, Inc. (CFR - Free Report) reported second-quarter earnings per share of $1.80, surpassing the Zacks Consensus Estimate of $1.60. Results also compared favorably with the prior-year quarter figure of $1.47 per share.
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Fidelity (FIS) Tops Q2 Earnings & Revenues Estimates, Ups View
Fidelity National Information Services’ (FIS - Free Report) second-quarter 2021 adjusted net earnings per share were $1.61, surpassing the Zacks Consensus Estimate of $1.55. Also, the bottom line compared favorably with the year-ago quarter figure of $1.15.
Notable increase in margin and organic revenue growth were positives. Given the robust activity in terms of new sales and an expanding backlog of revenue under contract in the June-end quarter, the company improved its guidance for 2021. However, flaring expenses posed a major concern.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $341 million or 55 cents per share compared with $19 million or 3 cents per share in the prior-year quarter.
Organic Revenues Rise, Expenses Increase
Revenues in the quarter were $3.48 billion, up 17% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $3.39 billion. Organic revenues increased 16% in the quarter on higher growth across all three operating segments.
Segment-wise, Merchant Solutions’ revenues climbed 45% to $1.18 billion. Revenues from Banking Solutions rose 8% to $1.58 million. Capital Market Solutions’ revenues jumped 6% to $630 million.
Selling, general and administrative expenses were $977 million, up 16.3% year over year.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased to $1.52 billion from $1.15 billion in the year-ago quarter. Adjusted EBITDA margin expanded 460 basis points to 43.7%.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents were $1.30 billion compared with $1.96 billion as of Dec 31, 2020. Debt outstanding was $19.4 billion.
In the second quarter, net cash provided by operations was $1 billion. The company reported a free cash flow of $1 billion.
It paid out dividends worth $242 million in the reported quarter and repurchased 2.7 million shares for $400 million.
Guidance
Third Quarter
Fidelity expects GAAP revenues between $3.49 billion and $3.52 billion. The company expects to report earnings per share between 40 cents and 50 cents. Adjusted earnings per share are expected to be $1.66-$1.69.
Full Year
For 2021, GAAP revenues are projected to be between $13.9 billion and $14 billion. The company expects to report earnings per share of $1.20-$1.45. Adjusted earnings per share are expected to be $6.45-$6.60.
Our Viewpoint
Fidelity’s better-than-expected second-quarter results were supported by higher revenue growth across all three operating segments.The company remains well-poised for growth, backed by its attractive core business, with many ongoing initiatives and a broad customer base. Also, higher investments in mobile banking and innovative products are expected to support Fidelity's growth over the long term.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Fidelity National Information Services, Inc. price-consensus-eps-surprise-chart | Fidelity National Information Services, Inc. Quote
The company currently 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 Companies
Lazard Ltd (LAZ - Free Report) reported second-quarter 2021 adjusted earnings of $1.28 per share, beating the Zacks Consensus Estimate of 89 cents. The reported figure also reflected 91% year-over-year growth.
Federated Hermes (FHI - Free Report) reported second-quarter 2021 earnings per share of 67 cents, in line with the Zacks Consensus Estimate. The figure, however, compared unfavorably with the prior-year quarter earnings of 80 cents.
Cullen/Frost Bankers, Inc. (CFR - Free Report) reported second-quarter earnings per share of $1.80, surpassing the Zacks Consensus Estimate of $1.60. Results also compared favorably with the prior-year quarter figure of $1.47 per share.