We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fidelity National (FIS) Q3 Earnings Top, Expenses Decline
Read MoreHide Full Article
Fidelity National Information Services’ (FIS - Free Report) third-quarter 2018 adjusted earnings per share from continuing operations came in at $1.33, surpassing the Zacks Consensus Estimate of $1.30. Also, earnings improved 13.7% from the year-ago quarter figure of $1.17.
Lower expenses and expanding margin were the key tailwinds. However, decline in revenues and huge outstanding debt remain key concerns.
On a GAAP basis, the company reported net earnings of $154 million or 47 cents in the quarter compared with $59 million or 18 cents in the prior-year quarter.
Decline in Expenses Partially Offset by Lower Revenues
GAAP revenues for the quarter came in at $2.08 billion, which declined nearly 1% year over year. Also, the figure lagged the Zacks Consensus Estimate of $2.09 billion.
Organic revenue growth was nearly 4% in the quarter.
Selling, general and administrative expenses came in at $283 million, down 12.9% year over year.
Segment wise, Integrated Financial Solutions’ GAAP revenues grew 5.1% to $1.09 billion while revenues from Global Financial Solutions declined 6.1% to $916 million. Corporate/Other revenues decreased 6.6% to $78 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose nearly 8% year over year to $808 million while adjusted EBITDA margin expanded 290 basis points to 38.7%.
Balance Sheet & Cash Flow
As of Sep 30, 2018, cash and cash equivalents were $632 million compared with $786 million as of Jun 30, 2017. Debt outstanding was nearly $9.04 billion.
In the third quarter, net cash provided by operations was $464 million and free cash flow was $356 million.
Fidelity paid dividends worth $105 million in the quarter and repurchased 4.3 million shares at a total cost of about $465 million. As of Sep 30, 2018, the company had about $2.83 billion share repurchase authorization remaining.
Guidance for 2018
Fidelity expects organic revenue growth to be about 3% while GAAP revenues are expected to decline 2.5%.
Adjusted earnings per share are expected to be in the band of $5.20-$5.24, up from $5.18-$5.34 expected previously.
Adjusted EBITDA margin is expected to be about 37%, unchanged from prior guidance.
Our Take
Fidelity enjoys a dominant position in financial and payments solutions business, backed by its robust product portfolio. We believe that the company is well positioned to benefit from increasing investment in digitization.
However, increasing consolidation in the banking sector, challenging environment for the Payments Solutions business and an uncertain regulatory environment are the primary headwinds. Also, consistently declining revenues remain a major concern.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Alliance Data Systems Corporation’s operating earnings of $6.26 per share in the third quarter of 2018 were in line with the Zacks Consensus Estimate. The bottom line improved 17% year over year on strength in Card Services and LoyaltyOne segments.
Visa (V - Free Report) reported fourth-quarter fiscal 2018 (ended Sep 30, 2018) earnings of $1.21 per share, beating the Zacks Consensus Estimate by 0.83%. Also, the bottom line improved 34% year over year.
Total System Services’ third-quarter 2018 earnings per share of $1.16 surpassed the Zacks Consensus Estimate by 6.4% and surged nearly 32% year over year. Exceptional performance of all three segments contributed to this favorable result.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Fidelity National (FIS) Q3 Earnings Top, Expenses Decline
Fidelity National Information Services’ (FIS - Free Report) third-quarter 2018 adjusted earnings per share from continuing operations came in at $1.33, surpassing the Zacks Consensus Estimate of $1.30. Also, earnings improved 13.7% from the year-ago quarter figure of $1.17.
Lower expenses and expanding margin were the key tailwinds. However, decline in revenues and huge outstanding debt remain key concerns.
On a GAAP basis, the company reported net earnings of $154 million or 47 cents in the quarter compared with $59 million or 18 cents in the prior-year quarter.
Decline in Expenses Partially Offset by Lower Revenues
GAAP revenues for the quarter came in at $2.08 billion, which declined nearly 1% year over year. Also, the figure lagged the Zacks Consensus Estimate of $2.09 billion.
Organic revenue growth was nearly 4% in the quarter.
Selling, general and administrative expenses came in at $283 million, down 12.9% year over year.
Segment wise, Integrated Financial Solutions’ GAAP revenues grew 5.1% to $1.09 billion while revenues from Global Financial Solutions declined 6.1% to $916 million. Corporate/Other revenues decreased 6.6% to $78 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose nearly 8% year over year to $808 million while adjusted EBITDA margin expanded 290 basis points to 38.7%.
Balance Sheet & Cash Flow
As of Sep 30, 2018, cash and cash equivalents were $632 million compared with $786 million as of Jun 30, 2017. Debt outstanding was nearly $9.04 billion.
In the third quarter, net cash provided by operations was $464 million and free cash flow was $356 million.
Fidelity paid dividends worth $105 million in the quarter and repurchased 4.3 million shares at a total cost of about $465 million. As of Sep 30, 2018, the company had about $2.83 billion share repurchase authorization remaining.
Guidance for 2018
Fidelity expects organic revenue growth to be about 3% while GAAP revenues are expected to decline 2.5%.
Adjusted earnings per share are expected to be in the band of $5.20-$5.24, up from $5.18-$5.34 expected previously.
Adjusted EBITDA margin is expected to be about 37%, unchanged from prior guidance.
Our Take
Fidelity enjoys a dominant position in financial and payments solutions business, backed by its robust product portfolio. We believe that the company is well positioned to benefit from increasing investment in digitization.
However, increasing consolidation in the banking sector, challenging environment for the Payments Solutions business and an uncertain regulatory environment are the primary headwinds. Also, consistently declining revenues remain a major concern.
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise
Fidelity National Information Services, Inc. Price, Consensus and EPS Surprise | Fidelity National Information Services, Inc. Quote
Fidelity currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Stocks
Alliance Data Systems Corporation’s operating earnings of $6.26 per share in the third quarter of 2018 were in line with the Zacks Consensus Estimate. The bottom line improved 17% year over year on strength in Card Services and LoyaltyOne segments.
Visa (V - Free Report) reported fourth-quarter fiscal 2018 (ended Sep 30, 2018) earnings of $1.21 per share, beating the Zacks Consensus Estimate by 0.83%. Also, the bottom line improved 34% year over year.
Total System Services’ third-quarter 2018 earnings per share of $1.16 surpassed the Zacks Consensus Estimate by 6.4% and surged nearly 32% year over year. Exceptional performance of all three segments contributed to this favorable result.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>