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Euronet (EEFT) Stock Down 2.2% Despite Q1 Earnings Beat
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Euronet Worldwide, Inc. (EEFT - Free Report) shares have lost 2.2% since it reported first-quarter 2023 results on May 3. Despite reporting better-than-expected results, investors were concerned about the soft performance in its money transfer segment and rising expenses.
The quarterly results received an impetus from improving domestic and international withdrawal transactions, recovering travel and expanding physical and digital distribution networks coupled with the strong performance of point-of-sale (POS) acquiring business. However, the upside was partly offset by rising expenses.
EEFT reported first-quarter 2023 adjusted earnings of 87 cents per share, which outpaced the Zacks Consensus Estimate by 2.4%. The bottom line improved 26% year over year.
Total revenues amounted to $787.2 million, which rose 10% year over year or 14% on a constant-currency basis in the quarter under review. The top line beat the consensus mark by 2.3% and our estimate of $763.2 million.
Euronet Worldwide, Inc. Price, Consensus and EPS Surprise
EEFT reported a net income of 39 cents per share in the first quarter compared with the prior-year quarter’s figure of 17 cents. Operating income of $45.6 million increased 24% year over year but came lower than our estimate of operating income of $46.7 million.
Total operating expenses increased 8.8% year over year to $741.6 million, surpassing our estimate of $716.4 million. The increase was due to a rise in direct operating costs, salaries and benefits and selling, general and administrative expenses.
Adjusted EBITDA came in at $92.8 million, up 16.7% year over year in the quarter under review and higher than our estimate of adjusted EBITDA of $88.5 million.
Segmental Performances
The EFT Processing segment recorded revenues of $192.2 million, which climbed 32% year over year (up 40% on a constant-currency basis). The metric beat the Zacks Consensus Estimate by 6.3% but missed our estimate of $201.1 million.
Adjusted EBITDA of $29.6 million surged 85% year over year or 98% on a constant-currency basis in the first quarter but lagged our estimate of $38.7 million.
The segment’s operating income increased nearly two-fold year over year to $6.9 million. Total transactions of 1,838 million rose 38% year over year in the quarter under review but missed the consensus mark by 6.7%.
The segmental performance benefited from improved domestic and international withdrawal transactions resulting from the continued rebound in travel and growing POSprocessing revenues. Substantial volume increase in low-priced payment processing transactions within the Asia Pacific also accounted for the impressive segmental performance.
The epay segment’s revenues inched up 1% year over year and rose 5% on a constant-currency basis to $237.4 million in the first quarter. The figure missed the Zacks Consensus Estimate by 1.9% but beat our estimate of $228 million.
Adjusted EBITDA of $29.1 million increased 4% year over year. The metric came higher than our estimate of $22.3 million.
Operating income increased 5% year over year or 11% on a constant-currency basis to $27.5 million in the quarter under review.
Transactions totaled 973 million, which rose 13% year over year but missed the consensus mark by 7.2%.
Growth in digital branded payments, an expanding digital distribution channel and mobile growth contributed to the sound segmental performance.
The Money Transfer segment reported revenues of $359.4 million, which advanced 6% year over year (up 9% on a constant-currency basis) in the first quarter. The figure outpaced the Zacks Consensus Estimate by 3.2% and our estimate of $336 million.
Adjusted EBITDA decreased 3% year over year but improved 1% on a constant-currency basis to $41.1 million, higher than our estimate of $32.6 million.
Operating income of $32.6 million decreased 2% year over year in the quarter under review. Total transactions rose 12% year over year to 37.6 million, beating the consensus mark by 2.6%.
The solid segmental results were aided by 13% growth in U.S.-outbound transactions and 16% growth in international-originated money transfers.
Corporate and Other’s expenses of $21.4 million escalated 29.7% year over year due to elevated short and long-term compensation expenses.
Financial Update (as of Mar 31, 2023)
Euronet exited the first quarter with cash and cash equivalents of $1,065.8 million, down from $1,131.2 million at 2022-end. Total assets decreased to $5,010.6 million from $5,403.6 million at 2022-end.
Debt obligations, net of the current portion, came in at $1,642.7 million. The figure advanced 2.1% from the level as of Dec 31, 2022.
Equity of $1,272.1 million increased from $1,244.4 million at 2022-end.
There was roughly $715 million left under EEFT’s revolving credit facilities at the first-quarter end.
2Q23 Outlook
Management anticipates adjusted earnings to be around $2 per share in the second quarter of 2023, which indicates an improvement of 29% from the prior-year quarter reported figure.
American Express Company (AXP - Free Report) reported first-quarter 2023 earnings of $2.40 per share, missing the Zacks Consensus Estimate of $2.64 and our estimate of $2.61. The bottom line also decreased 12% year over year.
For the quarter under review, AXP’s total revenues net of interest expense increased 22% year over year to $14,281 million. The top line beat the Zacks Consensus Estimate by 1.9% and came above our estimate of $14,017.9 million.
Synchrony Financial (SYF - Free Report) reported first-quarter 2023 adjusted earnings per share of $1.35, which missed the Zacks Consensus Estimate by 1.5% and our estimate of $1.36. Also, the bottom line plunged 23.7% year over year.
Net interest income improved 6.9% year over year to $4,051 million. It beat the consensus mark by a whisker and stood higher than our estimate of $3,885.4 million.
Virtu Financial, Inc.(VIRT - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 74 cents, which beat the Zacks Consensus Estimate of 60 cents and our estimate of 56 cents. However, the EPS fell from $1.27 a year ago.
VIRT’s adjusted net trading income of $373.1 million in the first quarter beat the consensus mark by 14.4% and our estimate by 16%. However, it fell from $505.1 million a year ago.
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Euronet (EEFT) Stock Down 2.2% Despite Q1 Earnings Beat
Euronet Worldwide, Inc. (EEFT - Free Report) shares have lost 2.2% since it reported first-quarter 2023 results on May 3. Despite reporting better-than-expected results, investors were concerned about the soft performance in its money transfer segment and rising expenses.
The quarterly results received an impetus from improving domestic and international withdrawal transactions, recovering travel and expanding physical and digital distribution networks coupled with the strong performance of point-of-sale (POS) acquiring business. However, the upside was partly offset by rising expenses.
EEFT reported first-quarter 2023 adjusted earnings of 87 cents per share, which outpaced the Zacks Consensus Estimate by 2.4%. The bottom line improved 26% year over year.
Total revenues amounted to $787.2 million, which rose 10% year over year or 14% on a constant-currency basis in the quarter under review. The top line beat the consensus mark by 2.3% and our estimate of $763.2 million.
Euronet Worldwide, Inc. Price, Consensus and EPS Surprise
Euronet Worldwide, Inc. price-consensus-eps-surprise-chart | Euronet Worldwide, Inc. Quote
Q1 Update
EEFT reported a net income of 39 cents per share in the first quarter compared with the prior-year quarter’s figure of 17 cents. Operating income of $45.6 million increased 24% year over year but came lower than our estimate of operating income of $46.7 million.
Total operating expenses increased 8.8% year over year to $741.6 million, surpassing our estimate of $716.4 million. The increase was due to a rise in direct operating costs, salaries and benefits and selling, general and administrative expenses.
Adjusted EBITDA came in at $92.8 million, up 16.7% year over year in the quarter under review and higher than our estimate of adjusted EBITDA of $88.5 million.
Segmental Performances
The EFT Processing segment recorded revenues of $192.2 million, which climbed 32% year over year (up 40% on a constant-currency basis). The metric beat the Zacks Consensus Estimate by 6.3% but missed our estimate of $201.1 million.
Adjusted EBITDA of $29.6 million surged 85% year over year or 98% on a constant-currency basis in the first quarter but lagged our estimate of $38.7 million.
The segment’s operating income increased nearly two-fold year over year to $6.9 million. Total transactions of 1,838 million rose 38% year over year in the quarter under review but missed the consensus mark by 6.7%.
The segmental performance benefited from improved domestic and international withdrawal transactions resulting from the continued rebound in travel and growing POSprocessing revenues. Substantial volume increase in low-priced payment processing transactions within the Asia Pacific also accounted for the impressive segmental performance.
The epay segment’s revenues inched up 1% year over year and rose 5% on a constant-currency basis to $237.4 million in the first quarter. The figure missed the Zacks Consensus Estimate by 1.9% but beat our estimate of $228 million.
Adjusted EBITDA of $29.1 million increased 4% year over year. The metric came higher than our estimate of $22.3 million.
Operating income increased 5% year over year or 11% on a constant-currency basis to $27.5 million in the quarter under review.
Transactions totaled 973 million, which rose 13% year over year but missed the consensus mark by 7.2%.
Growth in digital branded payments, an expanding digital distribution channel and mobile growth contributed to the sound segmental performance.
The Money Transfer segment reported revenues of $359.4 million, which advanced 6% year over year (up 9% on a constant-currency basis) in the first quarter. The figure outpaced the Zacks Consensus Estimate by 3.2% and our estimate of $336 million.
Adjusted EBITDA decreased 3% year over year but improved 1% on a constant-currency basis to $41.1 million, higher than our estimate of $32.6 million.
Operating income of $32.6 million decreased 2% year over year in the quarter under review. Total transactions rose 12% year over year to 37.6 million, beating the consensus mark by 2.6%.
The solid segmental results were aided by 13% growth in U.S.-outbound transactions and 16% growth in international-originated money transfers.
Corporate and Other’s expenses of $21.4 million escalated 29.7% year over year due to elevated short and long-term compensation expenses.
Financial Update (as of Mar 31, 2023)
Euronet exited the first quarter with cash and cash equivalents of $1,065.8 million, down from $1,131.2 million at 2022-end. Total assets decreased to $5,010.6 million from $5,403.6 million at 2022-end.
Debt obligations, net of the current portion, came in at $1,642.7 million. The figure advanced 2.1% from the level as of Dec 31, 2022.
Equity of $1,272.1 million increased from $1,244.4 million at 2022-end.
There was roughly $715 million left under EEFT’s revolving credit facilities at the first-quarter end.
2Q23 Outlook
Management anticipates adjusted earnings to be around $2 per share in the second quarter of 2023, which indicates an improvement of 29% from the prior-year quarter reported figure.
Zacks Rank
Euronet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Financial-Miscellaneous ServicesPlayers
American Express Company (AXP - Free Report) reported first-quarter 2023 earnings of $2.40 per share, missing the Zacks Consensus Estimate of $2.64 and our estimate of $2.61. The bottom line also decreased 12% year over year.
For the quarter under review, AXP’s total revenues net of interest expense increased 22% year over year to $14,281 million. The top line beat the Zacks Consensus Estimate by 1.9% and came above our estimate of $14,017.9 million.
Synchrony Financial (SYF - Free Report) reported first-quarter 2023 adjusted earnings per share of $1.35, which missed the Zacks Consensus Estimate by 1.5% and our estimate of $1.36. Also, the bottom line plunged 23.7% year over year.
Net interest income improved 6.9% year over year to $4,051 million. It beat the consensus mark by a whisker and stood higher than our estimate of $3,885.4 million.
Virtu Financial, Inc.(VIRT - Free Report) reported first-quarter 2023 adjusted earnings per share (EPS) of 74 cents, which beat the Zacks Consensus Estimate of 60 cents and our estimate of 56 cents. However, the EPS fell from $1.27 a year ago.
VIRT’s adjusted net trading income of $373.1 million in the first quarter beat the consensus mark by 14.4% and our estimate by 16%. However, it fell from $505.1 million a year ago.