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Fidelity (FIS) to Report Q1 Earnings: What's in the Cards?
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Fidelity National Information Services (FIS - Free Report) is scheduled to release first-quarter 2022 earnings results on May 3 before the opening bell. FIS’ revenues and earnings are anticipated to increase from the year-ago reported figures.
In the last-reported quarter, Fidelity’s earnings surpassed the Zacks Consensus Estimate. Notable increases in margin and organic revenues were positives. However, a rise in selling, general and administrative expenses was a hurdle.
Fidelity delivered earnings beats in all of the trailing four quarters, the average surprise being 3.1%.
Fidelity National Information Services, Inc. Price and EPS Surprise
The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.46, suggesting a 12.3% rise from the year-ago reported number. However, the Zacks Consensus Estimate for FIS’ first-quarter earnings has remained constant over the past month. Nonetheless, the consensus mark of $3.44 billion for first-quarter revenues indicates a 6.7% year-over-year rise.
Key Development During the Quarter
In February, Fidelity announced that it had acquired Payrix, an innovative financial technology firm, to amplify its ambit of e-commerce offerings to companies of all sizes in any industry.
Further, in January, Fidelity hiked its quarterly common stock dividend by 21% from the prior-quarter payout to 47 cents per share.
Factors to Note
Fidelity is expected to have continued benefiting from digital transformation in the global economy as well as the increasing investments in mobile banking, innovative products and financial infrastructure during the first quarter. The company’s ongoing investments in technology and innovation across high-growth markets might have helped expand its total addressable market.
Fidelity receives high recurring revenues from banking and capital markets contracts. This, along with a broad and diverse customer base and several ongoing initiatives, is expected to have supported revenue growth in the first quarter. Management expects revenues to be between $3.42-3.45 billion in the to-be-reported quarter. Oganic revenue growth of 7-8% is anticipated year over year, while revenues from corporate and other segment are anticipated to be $70 million.
Fidelity’s acquisition of Payrix will allow FIS to accelerating the company’s fast growing e-commerce business. This might have aided the company’s Banking Solutions unit revenues.
The Zacks Consensus Estimate for first-quarter revenues from this unit is $1.62 billion, suggesting a 2.5% decline from the prior quarter’s reported figure.
Although the pandemic is expected to have impacted travel trends, cross-border travel is likely to have comparatively rebounded following the relaxation of previous restrictions in several countries. This is anticipated to have shot up demand for Fidelity’s e-commerce payment gateway and the new payments platform.
However, merchant payments volume and revenues are expected to remain lower than its peers, both globally and in the United States. Moreover, certain discretionary spending verticals might have been adversely impacted. These factors might have offset the benefits derived from economic reopening, reducing the revenues from the Merchant’s Solutions segment.
The consensus mark for Merchant Solutions unit’s revenues of $1.1 billion suggests a decline of 9.6% from the figure reported in the year-ago quarter.
The company is investing in a multi-year modernization of platforms and applications after its successful consolidation of data centers and modernization of its IT infrastructure. Such upgrades might have increased costs in the first quarter. Further, a rising expense base, primarily due to higher salaries and benefits, as well as some inflationary pressures, is likely to have continued hurting the bottom line in the to-be-reported quarter.
What the Zacks Model Predicts
The proven Zacks model does not predict an earnings beat for Fidelity this time around. This is because Fidelity does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Fidelity has an Earnings ESP of -0.34%.
Zacks Rank: Fidelity currently carries a Zacks Rank of 3.
Stocks That Warrant a Look
FLEETCOR Technologies and Flywire Corporation (FLYW - Free Report) are a couple of stocks that you might want to consider, as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
The Earnings ESP for FLT is +1.12% and the company carries a Zacks Rank #3 at present. FLT is slated to report first-quarter 2022 results on May 5.
The Zacks Consensus Estimate for FLT’s first-quarter earnings has moved marginally upward over the past month.
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Fidelity (FIS) to Report Q1 Earnings: What's in the Cards?
Fidelity National Information Services (FIS - Free Report) is scheduled to release first-quarter 2022 earnings results on May 3 before the opening bell. FIS’ revenues and earnings are anticipated to increase from the year-ago reported figures.
In the last-reported quarter, Fidelity’s earnings surpassed the Zacks Consensus Estimate. Notable increases in margin and organic revenues were positives. However, a rise in selling, general and administrative expenses was a hurdle.
Fidelity delivered earnings beats in all of the trailing four quarters, the average surprise being 3.1%.
Fidelity National Information Services, Inc. Price and EPS Surprise
Fidelity National Information Services, Inc. price-eps-surprise | Fidelity National Information Services, Inc. Quote
The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.46, suggesting a 12.3% rise from the year-ago reported number. However, the Zacks Consensus Estimate for FIS’ first-quarter earnings has remained constant over the past month. Nonetheless, the consensus mark of $3.44 billion for first-quarter revenues indicates a 6.7% year-over-year rise.
Key Development During the Quarter
In February, Fidelity announced that it had acquired Payrix, an innovative financial technology firm, to amplify its ambit of e-commerce offerings to companies of all sizes in any industry.
Further, in January, Fidelity hiked its quarterly common stock dividend by 21% from the prior-quarter payout to 47 cents per share.
Factors to Note
Fidelity is expected to have continued benefiting from digital transformation in the global economy as well as the increasing investments in mobile banking, innovative products and financial infrastructure during the first quarter. The company’s ongoing investments in technology and innovation across high-growth markets might have helped expand its total addressable market.
Fidelity receives high recurring revenues from banking and capital markets contracts. This, along with a broad and diverse customer base and several ongoing initiatives, is expected to have supported revenue growth in the first quarter. Management expects revenues to be between $3.42-3.45 billion in the to-be-reported quarter. Oganic revenue growth of 7-8% is anticipated year over year, while revenues from corporate and other segment are anticipated to be $70 million.
Fidelity’s acquisition of Payrix will allow FIS to accelerating the company’s fast growing e-commerce business. This might have aided the company’s Banking Solutions unit revenues.
The Zacks Consensus Estimate for first-quarter revenues from this unit is $1.62 billion, suggesting a 2.5% decline from the prior quarter’s reported figure.
Although the pandemic is expected to have impacted travel trends, cross-border travel is likely to have comparatively rebounded following the relaxation of previous restrictions in several countries. This is anticipated to have shot up demand for Fidelity’s e-commerce payment gateway and the new payments platform.
However, merchant payments volume and revenues are expected to remain lower than its peers, both globally and in the United States. Moreover, certain discretionary spending verticals might have been adversely impacted. These factors might have offset the benefits derived from economic reopening, reducing the revenues from the Merchant’s Solutions segment.
The consensus mark for Merchant Solutions unit’s revenues of $1.1 billion suggests a decline of 9.6% from the figure reported in the year-ago quarter.
The company is investing in a multi-year modernization of platforms and applications after its successful consolidation of data centers and modernization of its IT infrastructure. Such upgrades might have increased costs in the first quarter. Further, a rising expense base, primarily due to higher salaries and benefits, as well as some inflationary pressures, is likely to have continued hurting the bottom line in the to-be-reported quarter.
What the Zacks Model Predicts
The proven Zacks model does not predict an earnings beat for Fidelity this time around. This is because Fidelity does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Fidelity has an Earnings ESP of -0.34%.
Zacks Rank: Fidelity currently carries a Zacks Rank of 3.
Stocks That Warrant a Look
FLEETCOR Technologies and Flywire Corporation (FLYW - Free Report) are a couple of stocks that you might want to consider, as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model.
The Earnings ESP for FLT is +1.12% and the company carries a Zacks Rank #3 at present. FLT is slated to report first-quarter 2022 results on May 5.
The Zacks Consensus Estimate for FLT’s first-quarter earnings has moved marginally upward over the past month.
FLYW is scheduled to release first-quarter results on May 10. FLYW currently has a Zacks Rank #3 and an Earnings ESP of +38.46%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for FYLW’s first-quarter earnings has stayed constant over the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.