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Nonetheless, the results failed to impress investors as there has not been any major price change since the earnings release on Oct 26.
Adjusted earnings (excluding $3.63 from non-recurring items) of $4.05 per share surpassed the Zacks Consensus Estimate by 7.4% and improved 15.4% year over year. Total revenues of $651.4 million outpaced the consensus estimate by 1.6% and increased 5.7% year over year.
Mobility revenues decreased 7% year over year to $350 million, missing our estimate of $353 million. Corporate Payments revenues of $135.2 million were up 19% year over year, which beat our prediction of $123 million. Benefits revenues of $166.1 million registered 34% year-over-year growth and surpassed our projection of $161.8 million.
Total volume across the company came in at $61.9 billion, up 7.6% year over year. The average number of vehicles serviced was around 19.1 million, up 4% from a year ago. Mobility payment processing transactions were down marginally year over year to $144.6 million.
Corporate Payments purchase volume jumped 35% year over year to $27.9 billion. Benefits average number of Software-as-a-Service accounts were up 9% to 19.9 million year over year.
Adjusted operating income climbed 12.9% to $272.2 million from the year-ago quarter’s $241.2 million. The adjusted operating income margin was 41.8%, down 270 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash equivalent balance of $957.8 million compared with $901.4 million at the prior-quarter end. Long-term debt was $2.65 billion compared with $2.5 billion at the end of the previous quarter.
Guidance
For the fourth quarter of 2023, WEX anticipates revenues in the range of $650-$660 million, the midpoint ($655 million) of which is lower than the current Zacks Consensus Estimate of $655.6 million.
Adjusted net income is expected to be between $3.65 per share and $3.75 per share. The midpoint ($3.70) of the guided range is in line with the Zacks Consensus Estimate.
For 2023, revenues are now forecast to be between $2.53 billion and $2.54 billion compared with the previous expectation of $2.50 billion and $2.52 billion. The midpoint is pegged at $2.535 billion, slightly higher than the Zacks Consensus Estimate of $2.53 billion.
Adjusted net income is now expected to be between $14.64 per share and $14.74 per share compared with the prior anticipated range of $14.15-$14.35 per share. The raised range is above the Zacks Consensus Estimate of $14.45.
Recent Earnings Snapshots of Some Service Providers
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis. Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from the year-ago figure.
EFX’s total revenues of $1.32 billion missed the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings per share of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and jumped 8.2% year over year.
FI’s organic revenue growth was 12% in the quarter. This was driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
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WEX Stock Barely Moves Despite Q3 Earnings and Revenue Beat
WEX Inc. (WEX - Free Report) delivered better-than-expected third-quarter 2023 results.
Nonetheless, the results failed to impress investors as there has not been any major price change since the earnings release on Oct 26.
Adjusted earnings (excluding $3.63 from non-recurring items) of $4.05 per share surpassed the Zacks Consensus Estimate by 7.4% and improved 15.4% year over year. Total revenues of $651.4 million outpaced the consensus estimate by 1.6% and increased 5.7% year over year.
WEX Inc. Price, Consensus and EPS Surprise
WEX Inc. price-consensus-eps-surprise-chart | WEX Inc. Quote
Quarterly Details
Mobility revenues decreased 7% year over year to $350 million, missing our estimate of $353 million. Corporate Payments revenues of $135.2 million were up 19% year over year, which beat our prediction of $123 million. Benefits revenues of $166.1 million registered 34% year-over-year growth and surpassed our projection of $161.8 million.
Total volume across the company came in at $61.9 billion, up 7.6% year over year. The average number of vehicles serviced was around 19.1 million, up 4% from a year ago. Mobility payment processing transactions were down marginally year over year to $144.6 million.
Corporate Payments purchase volume jumped 35% year over year to $27.9 billion. Benefits average number of Software-as-a-Service accounts were up 9% to 19.9 million year over year.
Adjusted operating income climbed 12.9% to $272.2 million from the year-ago quarter’s $241.2 million. The adjusted operating income margin was 41.8%, down 270 basis points year over year.
Balance Sheet
WEX exited the quarter with a cash and cash equivalent balance of $957.8 million compared with $901.4 million at the prior-quarter end. Long-term debt was $2.65 billion compared with $2.5 billion at the end of the previous quarter.
Guidance
For the fourth quarter of 2023, WEX anticipates revenues in the range of $650-$660 million, the midpoint ($655 million) of which is lower than the current Zacks Consensus Estimate of $655.6 million.
Adjusted net income is expected to be between $3.65 per share and $3.75 per share. The midpoint ($3.70) of the guided range is in line with the Zacks Consensus Estimate.
For 2023, revenues are now forecast to be between $2.53 billion and $2.54 billion compared with the previous expectation of $2.50 billion and $2.52 billion. The midpoint is pegged at $2.535 billion, slightly higher than the Zacks Consensus Estimate of $2.53 billion.
Adjusted net income is now expected to be between $14.64 per share and $14.74 per share compared with the prior anticipated range of $14.15-$14.35 per share. The raised range is above the Zacks Consensus Estimate of $14.45.
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
The Interpublic Group of Companies, Inc. (IPG - Free Report) posted third-quarter 2023 results, wherein both earnings and revenues missed the Zacks Consensus Estimate.
IPG’s adjusted earnings of 70 cents per share lagged the consensus estimate by 6.7%. The bottom line, however, climbed 11.1% on a year-over-year basis. Net revenues of $2.31 billion fell short of the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. (EFX - Free Report) reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%. Yet, the metric rose 1.7% from the year-ago figure.
EFX’s total revenues of $1.32 billion missed the consensus estimate by 0.7%. Nonetheless, the figure gained 6% from a year ago on a reported basis and 6.5% on a local-currency basis.
Fiserv, Inc. (FI - Free Report) reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Adjusted earnings per share of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and jumped 8.2% year over year.
FI’s organic revenue growth was 12% in the quarter. This was driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.