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The earnings beat failed to impress the market as there has not been any major price change since the earnings release on Jul 27.
Adjusted earnings of $3.63 per share surpassed the Zacks Consensus Estimate by 3.4% but decreased 2.2% year over year. Total revenues of $621.3 million surpassed the consensus mark by a slight margin and increased 3.9% year over year.
WEX shares have gained 12.4% in the past year, significantly outperforming the 4.6% rally of the industry it belongs to.
Mobility revenues decreased 10% year over year to $340.2 million, missing our estimate of $371 million. Corporate Payments revenues of $121.9 million were up 21% year over year, which beat our estimate of $171.7 million. Benefits revenues of $159.2 million registered 34% year-over-year growth and surpassed our estimate of $138.6 million.
Total volume across the company came in at $55.3 billion, down 2.3% year over year. The average number of vehicles serviced was around 18.9 million, up 8% from the year-ago quarter’s figure. Mobility payment processing transactions were down 1% year over year to 142.4 million.
Corporate Payments purchase volume surged 34% year over year to $22.9 billion. Benefits average number of Software-as-a-Service accounts were up 11% to 19.5 million year over year.
Adjusted operating income declined 1.1% to $250.6 million from the year-ago quarter’s $253.3 million. The adjusted operating income margin was 40.3%, down 200 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash equivalents balance of $901.4 million compared with $921.7 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.
Guidance
For the third quarter of 2023, WEX anticipates revenues in the range of $629-$639 million, the midpoint ($634 million) of which is lower than the current Zacks Consensus Estimate of $635.6 million. Adjusted net income is expected between $3.65 and $3.75 per share. The midpoint ($3.7) of the guided range is slightly lower than the Zacks Consensus Estimate of $3.69.
For 2023, revenues are now expected between $2.5 billion and $2.52 billion compared with the previous expectation of $2.45-$2.49 billion. The current Zacks Consensus Estimate stands at $2.5 billion.
Adjusted net income is now expected between $14.15 and $14.35 per share compared with the prior expectation of $13.85 and $14.25 per share. The raised range is above the Zacks Consensus Estimate of $14.09.
Recent Earnings Snapshots of Some Service Providers
Omnicom (OMC - Free Report) reported mixed second-quarter 2023 results, wherein the company’s earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
OMC’s earnings of $1.81 per share beat the consensus estimate by 0.6% and increased 7.7% year over year. Total revenues of $3.6 billion lagged the consensus estimate by 0.3% but increased 1.2% year over year.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
EFX’s adjusted earnings came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% but matched the year-ago figure on a reported basis.
Interpublic’s (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same.
IPG’s adjusted earnings came in at 74 cents per share, beating the Zacks Consensus Estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.
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WEX Stock Barely Moves Despite Q2 Earnings and Revenues Beat
WEX Inc. (WEX - Free Report) delivered better-than-expected second-quarter 2023 results.
The earnings beat failed to impress the market as there has not been any major price change since the earnings release on Jul 27.
Adjusted earnings of $3.63 per share surpassed the Zacks Consensus Estimate by 3.4% but decreased 2.2% year over year. Total revenues of $621.3 million surpassed the consensus mark by a slight margin and increased 3.9% year over year.
WEX shares have gained 12.4% in the past year, significantly outperforming the 4.6% rally of the industry it belongs to.
WEX Inc. Price, Consensus and EPS Surprise
WEX Inc. price-consensus-eps-surprise-chart | WEX Inc. Quote
Quarter Details
Mobility revenues decreased 10% year over year to $340.2 million, missing our estimate of $371 million. Corporate Payments revenues of $121.9 million were up 21% year over year, which beat our estimate of $171.7 million. Benefits revenues of $159.2 million registered 34% year-over-year growth and surpassed our estimate of $138.6 million.
Total volume across the company came in at $55.3 billion, down 2.3% year over year. The average number of vehicles serviced was around 18.9 million, up 8% from the year-ago quarter’s figure. Mobility payment processing transactions were down 1% year over year to 142.4 million.
Corporate Payments purchase volume surged 34% year over year to $22.9 billion. Benefits average number of Software-as-a-Service accounts were up 11% to 19.5 million year over year.
Adjusted operating income declined 1.1% to $250.6 million from the year-ago quarter’s $253.3 million. The adjusted operating income margin was 40.3%, down 200 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash equivalents balance of $901.4 million compared with $921.7 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.
Guidance
For the third quarter of 2023, WEX anticipates revenues in the range of $629-$639 million, the midpoint ($634 million) of which is lower than the current Zacks Consensus Estimate of $635.6 million. Adjusted net income is expected between $3.65 and $3.75 per share. The midpoint ($3.7) of the guided range is slightly lower than the Zacks Consensus Estimate of $3.69.
For 2023, revenues are now expected between $2.5 billion and $2.52 billion compared with the previous expectation of $2.45-$2.49 billion. The current Zacks Consensus Estimate stands at $2.5 billion.
Adjusted net income is now expected between $14.15 and $14.35 per share compared with the prior expectation of $13.85 and $14.25 per share. The raised range is above the Zacks Consensus Estimate of $14.09.
Currently, WEX carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots of Some Service Providers
Omnicom (OMC - Free Report) reported mixed second-quarter 2023 results, wherein the company’s earnings surpassed the Zacks Consensus Estimate but revenues missed the same.
OMC’s earnings of $1.81 per share beat the consensus estimate by 0.6% and increased 7.7% year over year. Total revenues of $3.6 billion lagged the consensus estimate by 0.3% but increased 1.2% year over year.
Equifax (EFX - Free Report) reported mixed second-quarter 2023 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.
EFX’s adjusted earnings came in at $1.71 per share, beating the consensus mark by 2.4% but declining 18.2% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.4% but matched the year-ago figure on a reported basis.
Interpublic’s (IPG - Free Report) second-quarter 2023 earnings surpassed the Zacks Consensus Estimate while revenues missed the same.
IPG’s adjusted earnings came in at 74 cents per share, beating the Zacks Consensus Estimate by 23.3% but declining 17.5% on a year-over-year basis. Net revenues of $2.33 billion missed the consensus estimate by 2.9% and decreased 14.9% on a year-over-year basis. Total revenues of $2.67 billion decreased 2.6% year over year.