It has been about a month since the last earnings report for First Data . Shares have added about 0.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is First Data due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
First Data Q1 Earnings Match Estimates, Revenues Beat
First Data's first-quarter 2019 adjusted earnings per share of 31 cents came in line with the Zacks Consensus Estimate and were ahead of the year-ago figure by 2 cents. The bottom line benefited from improved operating results, partially offset by unfavorable foreign currency movements and a higher adjusted tax rate in the current period.
Total segment revenues of $2.12 billion beat the consensus estimate by $34 million. The top line was up 2% year over year on a reported basis and 8% on an organic constant currency basis. Consolidated revenues of $2.32 billion were up 1% year over year on the back of solid segment revenue growth, partially offset by the impact of recent divestitures in Global Financial Solutions and unfavorable foreign currency movements.
Segments in Detail
The Global Business Solutions segment generated revenues of $1.39 billion, which grew 5% year over year on a reported basis and 10% on an organic constant currency basis.
Global Financial Solutions revenues came in at $369 million, down 8% year over year on a reported basis but up 9% on an organic constant-currency basis.
Network & Security Solutions segment generated revenues of $361 million, which were flat year over year on a reported as well as organic constant-currency basis.
Operating Results
Total segment EBITDA came in at $754 million, up 3% year over year on a reported basis and 10% on an organic constant currency basis. Total segment EBITDA margin was 35.6%, up 80 basis points on an organic constant currency basis
Operating profit increased 22.1% year over year to $425 million. Total expenses declined 2.2% from the year-ago quarter level of $1.89 billion.
Balance Sheet & Cash Flow
First Data exited first-quarter 2019 with cash and cash equivalents of $619 million compared with $555 million at the end of the prior quarter. Long-term debt was $16.3 billion compared with $16.4 billion at the end of the previous quarter.
The company generated $615 million of cash from operating activities in the reported quarter. Free cash flow was $397 million. Capital expenditures were $166 million.
2019 Guidance
First Data reaffirmed its 2019 guidance that excludes impacts of its merger with Fiserv. For total segment revenues, management expects organic constant currency growth of 5-6%. Total segment EBITDA is expected to register 6-8% growth on organic constant currency basis. Adjusted earnings are expected in the range of $1.55-$1.58 per share. Full-year free cash flow is projected to be more than $1.5 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, First Data has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
First Data has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is First Data (FDC) Up 0.9% Since Last Earnings Report?
It has been about a month since the last earnings report for First Data . Shares have added about 0.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is First Data due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
First Data Q1 Earnings Match Estimates, Revenues Beat
First Data's first-quarter 2019 adjusted earnings per share of 31 cents came in line with the Zacks Consensus Estimate and were ahead of the year-ago figure by 2 cents. The bottom line benefited from improved operating results, partially offset by unfavorable foreign currency movements and a higher adjusted tax rate in the current period.
Total segment revenues of $2.12 billion beat the consensus estimate by $34 million. The top line was up 2% year over year on a reported basis and 8% on an organic constant currency basis. Consolidated revenues of $2.32 billion were up 1% year over year on the back of solid segment revenue growth, partially offset by the impact of recent divestitures in Global Financial Solutions and unfavorable foreign currency movements.
Segments in Detail
The Global Business Solutions segment generated revenues of $1.39 billion, which grew 5% year over year on a reported basis and 10% on an organic constant currency basis.
Global Financial Solutions revenues came in at $369 million, down 8% year over year on a reported basis but up 9% on an organic constant-currency basis.
Network & Security Solutions segment generated revenues of $361 million, which were flat year over year on a reported as well as organic constant-currency basis.
Operating Results
Total segment EBITDA came in at $754 million, up 3% year over year on a reported basis and 10% on an organic constant currency basis. Total segment EBITDA margin was 35.6%, up 80 basis points on an organic constant currency basis
Operating profit increased 22.1% year over year to $425 million. Total expenses declined 2.2% from the year-ago quarter level of $1.89 billion.
Balance Sheet & Cash Flow
First Data exited first-quarter 2019 with cash and cash equivalents of $619 million compared with $555 million at the end of the prior quarter. Long-term debt was $16.3 billion compared with $16.4 billion at the end of the previous quarter.
The company generated $615 million of cash from operating activities in the reported quarter. Free cash flow was $397 million. Capital expenditures were $166 million.
2019 Guidance
First Data reaffirmed its 2019 guidance that excludes impacts of its merger with Fiserv. For total segment revenues, management expects organic constant currency growth of 5-6%. Total segment EBITDA is expected to register 6-8% growth on organic constant currency basis. Adjusted earnings are expected in the range of $1.55-$1.58 per share. Full-year free cash flow is projected to be more than $1.5 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, First Data has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
First Data has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.