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Fiserv Q3 Earnings Beat, Revenues Miss Despite Strong Segments
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Fiserv, Inc. (FI - Free Report) has reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the mark.
FI’s adjusted earnings per share (excluding $1.3 from non-recurring items) of $2.3 beat the consensus mark by 2.2% and gained 17.4% year over year. Adjusted revenues of $4.9 billion missed the consensus estimate by a slight margin but rose a tad on a year-over-year basis.
The FI stock has gained 25.4% over the past three months, outperforming the 11.4% rally of the industry it belongs to and the 5.2% rise of the Zacks S&P 500 composite.
Processing and services’ revenues of $4.2 billion increased 5.7% on a year-over-year basis and missed our estimate of $4.3 billion. Revenues in the Product segment were $978 million, up 13.1% from the year-ago quarter’s actual and surpassing our expectation of $947.7 million.
Revenues from Merchant Acceptance were $2.5 billion, growing 9.3% year over year and meeting our estimated figure. The Financial Solutions segment reported revenues of $2.4 billion, a 4.9% increase from the year-ago quarter and meeting our estimate.
The operating margin for the Merchant acceptance segment was 37.7%, up 290 basis points (bps) on a year-over-year basis. The adjusted operating margin for the Financial Solutions segment was 47.4%, increasing 40 bps from the year-ago quarter.
Balance Sheet & Cash Flow of FI
Fiserv exited the third quarter of 2024 with cash and cash equivalents of $1.2 billion, flat with the third quarter of 2023. The long-term debt was $24.1 billion compared with $24.4 billion in the second quarter of 2024. FI generated $2.2 million in net cash from operating activities, whereas its free cash flow was $1.9 billion. Capital expenditure was $402 million. The company repurchased 7.6 million shares for $1.3 billion in the quarter.
Fiserv's 2024 Guidance
The company has updated its 2024 guidance for adjusted earnings per share to $8.73-$8.80 from $8.65-$8.80 mentioned at the end of the previous quarter. The mid-point ($8.77) of the updated guidance is higher than the Zacks Consensus Estimate for earnings of $8.75. Fiserv updated its year-over-year earnings per share growth guidance to 16-17% from the 15-17% stated at the end of second-quarter 2024. FI updated its year-over-year organic revenue growth guidance from the 15-17% mentioned at the end of the previous quarter to 16-17%.
EFX’s adjusted earnings (excluding 72 cents from non-recurring items) were $1.8 per share, outpacing the Zacks Consensus Estimate by a slight margin and increasing 5.1% from the year-ago quarter. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but grew 9.3% on a year-over-year basis.
PAYX’s earnings of $1.2 per share beat the Zacks Consensus Estimate by 1.8% and increased 1.8% from the year-ago quarter. Total revenues of $1.3 billion outpaced the consensus estimate by a slight margin and gained 2.5% from the year-ago quarter.
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Fiserv Q3 Earnings Beat, Revenues Miss Despite Strong Segments
Fiserv, Inc. (FI - Free Report) has reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the mark.
See Zacks Earnings Calendar to stay ahead of market-making news.
FI’s adjusted earnings per share (excluding $1.3 from non-recurring items) of $2.3 beat the consensus mark by 2.2% and gained 17.4% year over year. Adjusted revenues of $4.9 billion missed the consensus estimate by a slight margin but rose a tad on a year-over-year basis.
The FI stock has gained 25.4% over the past three months, outperforming the 11.4% rally of the industry it belongs to and the 5.2% rise of the Zacks S&P 500 composite.
Fiserv, Inc. Price and EPS Surprise
Fiserv, Inc. price-eps-surprise | Fiserv, Inc. Quote
Fiserv's Quarterly Details
Processing and services’ revenues of $4.2 billion increased 5.7% on a year-over-year basis and missed our estimate of $4.3 billion. Revenues in the Product segment were $978 million, up 13.1% from the year-ago quarter’s actual and surpassing our expectation of $947.7 million.
Revenues from Merchant Acceptance were $2.5 billion, growing 9.3% year over year and meeting our estimated figure. The Financial Solutions segment reported revenues of $2.4 billion, a 4.9% increase from the year-ago quarter and meeting our estimate.
The operating margin for the Merchant acceptance segment was 37.7%, up 290 basis points (bps) on a year-over-year basis. The adjusted operating margin for the Financial Solutions segment was 47.4%, increasing 40 bps from the year-ago quarter.
Balance Sheet & Cash Flow of FI
Fiserv exited the third quarter of 2024 with cash and cash equivalents of $1.2 billion, flat with the third quarter of 2023. The long-term debt was $24.1 billion compared with $24.4 billion in the second quarter of 2024. FI generated $2.2 million in net cash from operating activities, whereas its free cash flow was $1.9 billion. Capital expenditure was $402 million. The company repurchased 7.6 million shares for $1.3 billion in the quarter.
Fiserv's 2024 Guidance
The company has updated its 2024 guidance for adjusted earnings per share to $8.73-$8.80 from $8.65-$8.80 mentioned at the end of the previous quarter. The mid-point ($8.77) of the updated guidance is higher than the Zacks Consensus Estimate for earnings of $8.75. Fiserv updated its year-over-year earnings per share growth guidance to 16-17% from the 15-17% stated at the end of second-quarter 2024. FI updated its year-over-year organic revenue growth guidance from the 15-17% mentioned at the end of the previous quarter to 16-17%.
Fiserv carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshots of FI's Peers
Equifax Inc. (EFX - Free Report) reported mixed third-quarter 2024 results.
EFX’s adjusted earnings (excluding 72 cents from non-recurring items) were $1.8 per share, outpacing the Zacks Consensus Estimate by a slight margin and increasing 5.1% from the year-ago quarter. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but grew 9.3% on a year-over-year basis.
Paychex, Inc. (PAYX - Free Report) reported impressive first-quarter fiscal 2025 results.
PAYX’s earnings of $1.2 per share beat the Zacks Consensus Estimate by 1.8% and increased 1.8% from the year-ago quarter. Total revenues of $1.3 billion outpaced the consensus estimate by a slight margin and gained 2.5% from the year-ago quarter.