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Adjusted earnings of $3.44 per share surpassed the Zacks Consensus Estimate by 7.2% and increased 33.3% year over year. Total revenues of $618.6 million surpassed the consensus mark by 7.4% and increased 24.3% year over year, mainly driven by an increase in volumes from customer wins and renewals.
The earnings beat, however, failed to impress the market as there has not been any major price change since the earnings release. WEX shares have gained 20.7% in the past year against the 3.3% decline of the industry it belongs to.
Quarter Details
Fleet revenues were up 20% year over year to $367.2 million. Travel and Corporate Solutions’ revenues of $110.7 million were up 36% year over year. Health revenues of $140.7 million registered 29% year-over-year growth.
Total volume across the company was $212 billion, up 45% year over year. The average number of vehicles serviced was 18.7 million, up 11% from the year-ago quarter figure. Fleet Solutions segment’s payment processing transactions were up 5% year over year to 139.2 million.
Travel and Corporate Solutions' purchase volume climbed 57% year over year to $17.1 billion. Health and Employee Benefit Solutions' average number of Software-as-a-Service accounts was up 14% to 18.5 million year over year.
Adjusted operating income increased 28.7% to $237.9 million from the year-ago quarter’s $184.8 million. The adjusted operating income margin was 38.5%, up 140 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash-equivalent balance of $922 million compared with $759.4 million witnessed at the end of the prior quarter. Long-term debt was $2.5 billion compared with $2.6 billion at the end of the previous quarter.
For the first quarter of 2023, WEX anticipates revenues of $600-$610 million. The mid-point ($605 million) of the guided range is above the Zacks Consensus Estimate of $603.15 million. Adjusted net income is expected between $3.15 and $3.25 per share. The mid-point of the guided range is in line with the Zacks Consensus Estimate of $3.20.
For 2023, revenues are expected between $2.43 billion and $2.47 billion. The Zacks Consensus Estimate is pegged at $2.47 billion. Adjusted net income is expected between $13.55 and $14.05 per share. The mid-point ($13.8 per share) of the guided range is slightly lower than the Zacks Consensus Estimate of $13.83.
Recent Performances of Some Other Business Services Companies
Robert Half International Inc. (RHI - Free Report) reported mixed fourth-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
RHI’s quarterly earnings of $1.37 per share beat the Zacks Consensus Estimate by 1.5% but declined 9.3% year over year. Revenues of $1.73 billion missed the Zacks Consensus Estimate by 0.6% and decreased 2.4% year over year.
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected second-quarter fiscal 2023 results.
ADP’s adjusted earnings per share of $1.96 beat the Zacks Consensus Estimate by 0.5% and grew 19% from the year-ago quarter. Total revenues of $4.4 billion beat the Zacks Consensus Estimate by 0.3% and improved 9.1% from the year-ago quarter.
Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported impressive third-quarter fiscal 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings per share of $1.07 beat the Zacks Consensus Estimate by 4.9% and increased 4.9% on a year-over-year basis.
BAH’s total revenues of $2.3 billion beat the Zacks Consensus Estimate by 4% and increased 12.1% on a year-over-year basis.
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WEX Q4 Earnings and Revenues Beat Estimates, Increase Y/Y
WEX Inc. (WEX - Free Report) delivered better-than-expected fourth-quarter 2022 results.
Adjusted earnings of $3.44 per share surpassed the Zacks Consensus Estimate by 7.2% and increased 33.3% year over year. Total revenues of $618.6 million surpassed the consensus mark by 7.4% and increased 24.3% year over year, mainly driven by an increase in volumes from customer wins and renewals.
The earnings beat, however, failed to impress the market as there has not been any major price change since the earnings release. WEX shares have gained 20.7% in the past year against the 3.3% decline of the industry it belongs to.
Quarter Details
Fleet revenues were up 20% year over year to $367.2 million. Travel and Corporate Solutions’ revenues of $110.7 million were up 36% year over year. Health revenues of $140.7 million registered 29% year-over-year growth.
Total volume across the company was $212 billion, up 45% year over year. The average number of vehicles serviced was 18.7 million, up 11% from the year-ago quarter figure. Fleet Solutions segment’s payment processing transactions were up 5% year over year to 139.2 million.
Travel and Corporate Solutions' purchase volume climbed 57% year over year to $17.1 billion. Health and Employee Benefit Solutions' average number of Software-as-a-Service accounts was up 14% to 18.5 million year over year.
Adjusted operating income increased 28.7% to $237.9 million from the year-ago quarter’s $184.8 million. The adjusted operating income margin was 38.5%, up 140 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash-equivalent balance of $922 million compared with $759.4 million witnessed at the end of the prior quarter. Long-term debt was $2.5 billion compared with $2.6 billion at the end of the previous quarter.
WEX Inc. Price, Consensus and EPS Surprise
WEX Inc. price-consensus-eps-surprise-chart | WEX Inc. Quote
Guidance
For the first quarter of 2023, WEX anticipates revenues of $600-$610 million. The mid-point ($605 million) of the guided range is above the Zacks Consensus Estimate of $603.15 million. Adjusted net income is expected between $3.15 and $3.25 per share. The mid-point of the guided range is in line with the Zacks Consensus Estimate of $3.20.
For 2023, revenues are expected between $2.43 billion and $2.47 billion. The Zacks Consensus Estimate is pegged at $2.47 billion. Adjusted net income is expected between $13.55 and $14.05 per share. The mid-point ($13.8 per share) of the guided range is slightly lower than the Zacks Consensus Estimate of $13.83.
Currently, WEX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performances of Some Other Business Services Companies
Robert Half International Inc. (RHI - Free Report) reported mixed fourth-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
RHI’s quarterly earnings of $1.37 per share beat the Zacks Consensus Estimate by 1.5% but declined 9.3% year over year. Revenues of $1.73 billion missed the Zacks Consensus Estimate by 0.6% and decreased 2.4% year over year.
Automatic Data Processing, Inc. (ADP - Free Report) reported better-than-expected second-quarter fiscal 2023 results.
ADP’s adjusted earnings per share of $1.96 beat the Zacks Consensus Estimate by 0.5% and grew 19% from the year-ago quarter. Total revenues of $4.4 billion beat the Zacks Consensus Estimate by 0.3% and improved 9.1% from the year-ago quarter.
Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported impressive third-quarter fiscal 2023 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Quarterly adjusted earnings per share of $1.07 beat the Zacks Consensus Estimate by 4.9% and increased 4.9% on a year-over-year basis.
BAH’s total revenues of $2.3 billion beat the Zacks Consensus Estimate by 4% and increased 12.1% on a year-over-year basis.