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WEX Inc. (WEX - Free Report) reported mixed second-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimates, while revenues missed the same.
The stock declined 1.7% since the release of results on Jul 25 on weak 2024 earnings and revenue guidance.
WEX expects adjusted diluted earnings per share of $15.98-$16.38 compared with the $16.10-$16.60 provided in the preceding quarter. The mid-point ($16.18) of the same is higher than the consensus estimate for earnings of $16.16 per share.
The company expects revenues of $2.68-$2.72 billion compared with the prior mentioned $2.73-$2.77 billion. The mid-point ($2.7 billion) of WEX’s revised guided range meets the Zacks Consensus Estimate.
Quarterly adjusted earnings (excluding 2.1 cents from non-recurring items) of $3.9 share surpassed the Zacks Consensus Estimate by 2.9% and increased 7.7% from the year-ago quarter. Revenues of $673.5 million missed the consensus estimate marginally but rose 8.4% on a year-over-year basis.
The WEX stock has declined 20.2% over the past six months compared with the 1.9% fall of the industry it belongs toand against the 4.4% rise of the Zacks S&P 500 Composite.
The Mobility segment’s revenues increased 19.4% from the year-ago quarter to $359.6 million and missed our estimate of $360.6 million. The Corporate Payments segment’s revenues were $134.1 million, up 12.2% from the second quarter of 2023. The same missed our anticipation of $134.5 million. It is likely to have benefited from the increase in the travel-related customer purchase volume.
The Benefits segment’s revenues increased 20.6% year over year to $179.8 million. The figure missed our expectation of $182.4 million. SaaS account growth that portrays a strong core market dynamic, a rise in purchase volume and increased revenues from custodial HSA cash deposits are anticipated to have benefited this segment’s revenues.
Operating Results
Adjusted operating income amounted to $273.9 million, up 9.2% from the year-ago quarter. The figure outpaced our estimate of $245.5 million. The adjusted operating income margin of 40.7% grew 40 basis points year over year, beating our estimate of 36.2%.
Balance Sheet & Cash Flow
WEX exited the second quarter of 2024 with cash and cash equivalents of $682.6 million compared with $7 million at the end of the preceding quarter. The long-term debt (net) was $3 billion compared with $3.1 billion at the end of the previous quarter.
The company utilized $7 million in cash from operating activities in the reported quarter. The adjusted free cash flow utilized was $161.1 million. Capital expenditure totaled $39.6 million.
Q3 Outlook
For the third quarter of 2024, the company raised its guidance for revenues to $688-$698 million from the $675-$685 million provided in the preceding quarter. The mid-point ($693 million) of WEX’s revised guided range is higher than the Zacks Consensus Estimate of $691.2 million. The company raised its adjusted diluted earnings per share guidance to $4.42-$4.52 from the $3.75-$3.85 provided in the preceding quarter. The mid-point ($4.47) of the revised guided range is higher than the consensus estimate for earnings of $4.45.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.5 beat the Zacks Consensus Estimate by 5.8% and increased 16.9% from the year-ago quarter. Revenues of $3.9 billion missed the consensus mark by a slight margin but increased 7.8% year over year.
VRSK’s adjusted earnings (excluding 11 cents from non-recurring items) were $1.6 per share, beating the Zacks Consensus Estimate by 7.2% and increasing 26.4% from the year-ago quarter. Total revenues of $704 million surpassed the consensus estimate marginally and increased 8% year over year on a reported basis and 6.9% on an organic-constant-currency basis.
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WEX Stock Price Decreases 2% Despite Posting Q2 Earnings Beat
WEX Inc. (WEX - Free Report) reported mixed second-quarter 2024 results, wherein earnings beat the Zacks Consensus Estimates, while revenues missed the same.
The stock declined 1.7% since the release of results on Jul 25 on weak 2024 earnings and revenue guidance.
WEX expects adjusted diluted earnings per share of $15.98-$16.38 compared with the $16.10-$16.60 provided in the preceding quarter. The mid-point ($16.18) of the same is higher than the consensus estimate for earnings of $16.16 per share.
The company expects revenues of $2.68-$2.72 billion compared with the prior mentioned $2.73-$2.77 billion. The mid-point ($2.7 billion) of WEX’s revised guided range meets the Zacks Consensus Estimate.
Quarterly adjusted earnings (excluding 2.1 cents from non-recurring items) of $3.9 share surpassed the Zacks Consensus Estimate by 2.9% and increased 7.7% from the year-ago quarter. Revenues of $673.5 million missed the consensus estimate marginally but rose 8.4% on a year-over-year basis.
The WEX stock has declined 20.2% over the past six months compared with the 1.9% fall of the industry it belongs toand against the 4.4% rise of the Zacks S&P 500 Composite.
WEX Inc. Price and EPS Surprise
WEX Inc. price-eps-surprise | WEX Inc. Quote
Segmental Revenues
The Mobility segment’s revenues increased 19.4% from the year-ago quarter to $359.6 million and missed our estimate of $360.6 million. The Corporate Payments segment’s revenues were $134.1 million, up 12.2% from the second quarter of 2023. The same missed our anticipation of $134.5 million. It is likely to have benefited from the increase in the travel-related customer purchase volume.
The Benefits segment’s revenues increased 20.6% year over year to $179.8 million. The figure missed our expectation of $182.4 million. SaaS account growth that portrays a strong core market dynamic, a rise in purchase volume and increased revenues from custodial HSA cash deposits are anticipated to have benefited this segment’s revenues.
Operating Results
Adjusted operating income amounted to $273.9 million, up 9.2% from the year-ago quarter. The figure outpaced our estimate of $245.5 million. The adjusted operating income margin of 40.7% grew 40 basis points year over year, beating our estimate of 36.2%.
Balance Sheet & Cash Flow
WEX exited the second quarter of 2024 with cash and cash equivalents of $682.6 million compared with $7 million at the end of the preceding quarter. The long-term debt (net) was $3 billion compared with $3.1 billion at the end of the previous quarter.
The company utilized $7 million in cash from operating activities in the reported quarter. The adjusted free cash flow utilized was $161.1 million. Capital expenditure totaled $39.6 million.
Q3 Outlook
For the third quarter of 2024, the company raised its guidance for revenues to $688-$698 million from the $675-$685 million provided in the preceding quarter. The mid-point ($693 million) of WEX’s revised guided range is higher than the Zacks Consensus Estimate of $691.2 million. The company raised its adjusted diluted earnings per share guidance to $4.42-$4.52 from the $3.75-$3.85 provided in the preceding quarter. The mid-point ($4.47) of the revised guided range is higher than the consensus estimate for earnings of $4.45.
Currently, WEX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Republic Services, Inc. (RSG - Free Report) reported mixed first-quarter 2024 results.
RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.5 beat the Zacks Consensus Estimate by 5.8% and increased 16.9% from the year-ago quarter. Revenues of $3.9 billion missed the consensus mark by a slight margin but increased 7.8% year over year.
Verisk Analytics Inc. (VRSK - Free Report) reported impressive first-quarter 2024 results.
VRSK’s adjusted earnings (excluding 11 cents from non-recurring items) were $1.6 per share, beating the Zacks Consensus Estimate by 7.2% and increasing 26.4% from the year-ago quarter. Total revenues of $704 million surpassed the consensus estimate marginally and increased 8% year over year on a reported basis and 6.9% on an organic-constant-currency basis.