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Why Is FleetCor Technologies (FLT) Down 5.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for FleetCor Technologies (FLT - Free Report) . Shares have lost about 5.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is FleetCor Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

FLEETCOR Surpasses Q2 Earnings & Revenues Estimates

FLEETCOR reported solid second-quarter 2022 results as both earnings and revenues surpassed the Zacks Consensus Estimate.  

Adjusted earnings (excluding 82 cents from non-recurring items) of $4.17 per share outpaced the consensus estimate by 7.2% and increased 32.4% year over year. The reported figure exceeded the guided range of $3.80-$3.90.

Revenues of $861.3 million beat the consensus mark by 5% and increased 29.1% year over year on a reported basis and 17% on a pro-forma and macro-adjusted basis. The reported figure exceeded the guided range of $805-$825 million.
 
Let’s check out the numbers in detail:

Revenues in Detail

Segment-wise, revenues from North America came in at $601.7 million, up 35.7% year over year. Internationally, revenues of $147.7 million increased 6.8% year over year. Revenues from Brazil grew 30.5% to $111.8 million.

Product-category-wise, fuel revenues of $347 million went up 18% year over year on a reported basis and 7% on a pro-forma and macro-adjusted basis.

Corporate Payments revenues of $189.7 million increased 35% year over year on a reported basis and 18% on a pro-forma and macro-adjusted basis.

Tolls revenues of $91.2 million improved 28% year over year on a reported basis and 19% on a pro-forma and macro-adjusted basis.

Lodging revenues of $116.9 million grew 88% year over year on a reported basis and 42% on a pro-forma and macro-adjusted basis.

Gift revenues of $51.7 million grew 60% year over year on a reported and 63% on a pro-forma and macro-adjusted basis.

Other revenues of $65 million decreased 2% year over year on a reported but inched up 1% on a pro-forma and macro-adjusted basis.

Operating Results

Operating income increased 24.5% from the prior-year quarter’s level to $370.5 million. Operating income margin fell 43% from 44.6% in the prior-year quarter.

Balance Sheet & Cash Flow

FLEETCOR exited second-quarter 2022 with cash, cash equivalents and restricted cash of $1.42 billion compared with $2.09 billion at the end of the prior quarter.

FLT provided $70.4 million of net cash from operating activities. Capital expenditures totaled $35.23 million.

In the reported quarter, FLEETCOR repurchased shares worth $372.56 million.

Q3 Guidance

For third-quarter 2022, FLEETCOR expects revenues between $870 million and $890 million.  Adjusted earnings per share are anticipated between $4.15 and $4.25.

2022 Guidance

FLEETCOR raised its 2022 guidance. Adjusted earnings per share are now anticipated between $15.85 and $16.05, comparing favorably with the prior-guided range of $15.45-$15.75. 

Revenues are now anticipated between $3.38 billion and $3.42 billion, comparing favorably with the prior-guided range of $3.335-$3.385. 

Adjusted tax rate is now anticipated between 26.5% and 27.5% compared with the prior-guided range of 26-27%. Interest expenses are now expected between $145 million and $155 million compared with the prior-guided range of $105-$115 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, FleetCor Technologies has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, FleetCor Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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