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Fidelity (FIS) to Announce Q2 Earnings: Here's What to Expect
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Fidelity National Information Services, Inc. (FIS - Free Report) is set to report second-quarter 2022 results on Aug 4, before the opening bell.
In the last reported quarter, the financial solutions provider’s adjusted earnings per share of $1.47 beat the Zacks Consensus Estimate by a penny, primarily on the continued recovery of the global economy from the pandemic. However, a rise in selling, general and administrative expenses was a hurdle.
The Zacks Consensus Estimate for second-quarter earnings per share of $1.70 has witnessed no movement in the past week. This estimate is indicative of a 5.6% improvement from the year-ago quarter’s reported earnings of $1.61 per share. The Zacks Consensus Estimate for revenues is pegged at $3.7 billion, suggesting a rise of 5.4% from the year-ago quarter’s reported figure.
Fidelity’s earnings beat estimates in each of the trailing four quarters, the average being 2.3%. This is depicted in the graph below.
Fidelity National Information Services, Inc. Price and EPS Surprise
In the second quarter, FIS is likely to have continued benefiting from the digital transformation of the global economy. Increasing investments in mobile banking and product expansion are also expected to have played a significant role in boosting results. Fidelity’s investments in technology and innovation across high-growth markets might have helped expand its total addressable market.
Fidelity’s acquisition of Payrix might have allowed it to accelerate the company’s fast-growing e-commerce business. This might have aided the company’s Banking Solutions unit profits. The Zacks Consensus Estimate for second-quarter adjusted EBITDA from this unit suggests a 3.8% increase from the prior quarter’s reported figure. Also, the consensus estimate for adjusted EBITDA margin is pegged at 44%.
Cross-border travel is likely to have witnessed a sharp rebound in the second quarter. This is anticipated to have shot up demand for Fidelity’s e-commerce payment gateway and the new payments platform. As such, the consensus estimate for adjusted EBITDA in Merchant Solutions indicates a 7.2% year-over-year rise. Further, the consensus estimate for adjusted EBITDA margin is pegged at 50%. This might have positioned the company for year-over-year growth in profits.
Moreover, the consensus mark for the Capital Market Solutions unit’s adjusted EBITDA signals a 3.4% increase from the year-ago quarter. Continued operating leverage is expected to have aided the segment’s profits. The consensus estimate for adjusted EBITDA margin is pegged at 47.4%.
However, the upgradation of platforms and applications might have increased costs incurred by the company in the second quarter. Also, a rising expense base, primarily due to higher salaries and benefits, as well as some inflationary pressures, is likely to have hurt the bottom line in the to-be-reported quarter, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Fidelity this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -1.44%. The Most Accurate Estimate is currently pegged at $1.68 per share, lower than the Zacks Consensus Estimate of $1.70.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fidelity currently carries a Zacks Rank #3.
While an earnings beat looks uncertain for Fidelity, here are some companies in the broader Business Services space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Palantir Technologies Inc. (PLTR - Free Report) has an Earnings ESP of +7.14% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Palantir Technologies’ top line for the to-be-reported quarter is pegged at $470 million, indicating a year-over-year rise of 25.1%. PLTR beat earnings estimates once in the trailing four quarters, met once, and missed on other two occasions.
Vivid Seats Inc. (SEAT - Free Report) has an Earnings ESP of +45.46% and currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Vivid Seats’ top line for the to-be-reported quarter is pegged at $128.4 million. The consensus mark for earnings per share is pegged at 6 cents for the second quarter. SEAT beat the earnings estimate in the last quarter, delivering a surprise of 100%.
Kelly Services, Inc. (KELYA - Free Report) has an Earnings ESP of +6.99% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Kelly Services’ bottom line for the to-be-reported quarter has improved 4.3% in the past 30 days. KELYA beat earnings estimates thrice in the trailing four quarters and missed once, with an average surprise of 46.3%.
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Fidelity (FIS) to Announce Q2 Earnings: Here's What to Expect
Fidelity National Information Services, Inc. (FIS - Free Report) is set to report second-quarter 2022 results on Aug 4, before the opening bell.
In the last reported quarter, the financial solutions provider’s adjusted earnings per share of $1.47 beat the Zacks Consensus Estimate by a penny, primarily on the continued recovery of the global economy from the pandemic. However, a rise in selling, general and administrative expenses was a hurdle.
Let’s see how things have shaped up prior to the second-quarter 2022 earnings announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings per share of $1.70 has witnessed no movement in the past week. This estimate is indicative of a 5.6% improvement from the year-ago quarter’s reported earnings of $1.61 per share. The Zacks Consensus Estimate for revenues is pegged at $3.7 billion, suggesting a rise of 5.4% from the year-ago quarter’s reported figure.
Fidelity’s earnings beat estimates in each of the trailing four quarters, the average being 2.3%. This is depicted in the graph below.
Fidelity National Information Services, Inc. Price and EPS Surprise
Fidelity National Information Services, Inc. price-eps-surprise | Fidelity National Information Services, Inc. Quote
Factors to Note
In the second quarter, FIS is likely to have continued benefiting from the digital transformation of the global economy. Increasing investments in mobile banking and product expansion are also expected to have played a significant role in boosting results. Fidelity’s investments in technology and innovation across high-growth markets might have helped expand its total addressable market.
Fidelity’s acquisition of Payrix might have allowed it to accelerate the company’s fast-growing e-commerce business. This might have aided the company’s Banking Solutions unit profits. The Zacks Consensus Estimate for second-quarter adjusted EBITDA from this unit suggests a 3.8% increase from the prior quarter’s reported figure. Also, the consensus estimate for adjusted EBITDA margin is pegged at 44%.
Cross-border travel is likely to have witnessed a sharp rebound in the second quarter. This is anticipated to have shot up demand for Fidelity’s e-commerce payment gateway and the new payments platform. As such, the consensus estimate for adjusted EBITDA in Merchant Solutions indicates a 7.2% year-over-year rise. Further, the consensus estimate for adjusted EBITDA margin is pegged at 50%. This might have positioned the company for year-over-year growth in profits.
Moreover, the consensus mark for the Capital Market Solutions unit’s adjusted EBITDA signals a 3.4% increase from the year-ago quarter. Continued operating leverage is expected to have aided the segment’s profits. The consensus estimate for adjusted EBITDA margin is pegged at 47.4%.
However, the upgradation of platforms and applications might have increased costs incurred by the company in the second quarter. Also, a rising expense base, primarily due to higher salaries and benefits, as well as some inflationary pressures, is likely to have hurt the bottom line in the to-be-reported quarter, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Fidelity this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -1.44%. The Most Accurate Estimate is currently pegged at $1.68 per share, lower than the Zacks Consensus Estimate of $1.70.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Fidelity currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
While an earnings beat looks uncertain for Fidelity, here are some companies in the broader Business Services space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Palantir Technologies Inc. (PLTR - Free Report) has an Earnings ESP of +7.14% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Palantir Technologies’ top line for the to-be-reported quarter is pegged at $470 million, indicating a year-over-year rise of 25.1%. PLTR beat earnings estimates once in the trailing four quarters, met once, and missed on other two occasions.
Vivid Seats Inc. (SEAT - Free Report) has an Earnings ESP of +45.46% and currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Vivid Seats’ top line for the to-be-reported quarter is pegged at $128.4 million. The consensus mark for earnings per share is pegged at 6 cents for the second quarter. SEAT beat the earnings estimate in the last quarter, delivering a surprise of 100%.
Kelly Services, Inc. (KELYA - Free Report) has an Earnings ESP of +6.99% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Kelly Services’ bottom line for the to-be-reported quarter has improved 4.3% in the past 30 days. KELYA beat earnings estimates thrice in the trailing four quarters and missed once, with an average surprise of 46.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.