It has been about a month since the last earnings report for First Data Corporation . Shares have added about 10.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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, Guides Well
First Data Corporation’s first-quarter 2017 earnings matched the Zacks Consensus Estimate. Shares were up 3.81% at the end of Monday’s trading in response to the decent results.
Consolidated Revenues
Consolidated revenues that include transaction and processing fees, product sales, reimbursable debit network fees, postage and other were $2.8 billion up 1% year over year on a reported as well as constant currency basis.
Revenues by Segment
Segmental revenues including that from Global Business Solutions, Global Financial Solutions and Network & Security Solutions came in at $1.7 billion up 2% year over year on a reported basis and 3% on a constant currency basis.
Global Business Solutions, Global Financial Solutions and Network & Security Solutions generated 56%, 23% and 21% of quarterly revenues, respectively.
Seasonality results in considerable variations in First Data’s quarterly revenues.
Global Business Solutions increased 2% year over year on a reported basis and 3% on a constant currency basis driven by strong results across North America, Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC) regions.
Global Financial Solutions were up 2% year over year on a reported basis and 5% on a constant currency basis. New business and internal growth in Australia drove the improvement.
Network & Security Solutions increased 3% year over year on a reported basis as well as constant currency basis driven by strength across EFT Network and Security and Fraud solutions.
Operating Performance
Segmental earnings before interest tax depreciation and amortization (EBITDA) came in at $651 million, up 2% on a reported basis and 4%, exclusive of the impacts from currency and the Australian ATM divestiture. Segment EBITDA margin of 37.7% was up 10 basis points year over year.
Excluding amortization of acquisition related intangibles, restructuring costs and other items, but including stock-based compensation costs, First Data reported adjusted net income of $197.62 million or 21 cents per share compared with the year-ago figure of $110.6 million or 12 cents per share. The growth was mainly driven by strong operating results and lower interest expense.
Balance Sheet and Cash Flow
At the end of the first quarter, cash and cash equivalents balance was $503 million compared with $385 million in the previous quarter. Long-term debt was $18.1 billion, almost flat sequentially.
The company generated $421 million in cash from operating activities and spent $117 million on capex and $43 million on distribution to minority interest and other. This resulted in free cash flow of $261 million, up 24% from $211 million in the year-ago period.
Outlook
Reiterating its earlier guidance for full-year 2017, the company continues to expect segment revenues to grow 3% to 5% and segment EBITDA to improve 5% to 7%. Similarly, adjusted EPS is still expected to grow 15% and free cash flow to stay above the $1 billion mark. Management expects the second half of the year to be stronger than the first half.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
First Data Corporation Price and Consensus
VGM Scores
At this time, the stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value and growth investors than momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
Image: Bigstock
Why Is First Data (FDC) Up 10.7% Since the Last Earnings Report?
It has been about a month since the last earnings report for First Data Corporation . Shares have added about 10.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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, Guides Well
First Data Corporation’s first-quarter 2017 earnings matched the Zacks Consensus Estimate. Shares were up 3.81% at the end of Monday’s trading in response to the decent results.
Consolidated Revenues
Consolidated revenues that include transaction and processing fees, product sales, reimbursable debit network fees, postage and other were $2.8 billion up 1% year over year on a reported as well as constant currency basis.
Revenues by Segment
Segmental revenues including that from Global Business Solutions, Global Financial Solutions and Network & Security Solutions came in at $1.7 billion up 2% year over year on a reported basis and 3% on a constant currency basis.
Global Business Solutions, Global Financial Solutions and Network & Security Solutions generated 56%, 23% and 21% of quarterly revenues, respectively.
Seasonality results in considerable variations in First Data’s quarterly revenues.
Global Business Solutions increased 2% year over year on a reported basis and 3% on a constant currency basis driven by strong results across North America, Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC) regions.
Global Financial Solutions were up 2% year over year on a reported basis and 5% on a constant currency basis. New business and internal growth in Australia drove the improvement.
Network & Security Solutions increased 3% year over year on a reported basis as well as constant currency basis driven by strength across EFT Network and Security and Fraud solutions.
Operating Performance
Segmental earnings before interest tax depreciation and amortization (EBITDA) came in at $651 million, up 2% on a reported basis and 4%, exclusive of the impacts from currency and the Australian ATM divestiture. Segment EBITDA margin of 37.7% was up 10 basis points year over year.
Excluding amortization of acquisition related intangibles, restructuring costs and other items, but including stock-based compensation costs, First Data reported adjusted net income of $197.62 million or 21 cents per share compared with the year-ago figure of $110.6 million or 12 cents per share. The growth was mainly driven by strong operating results and lower interest expense.
Balance Sheet and Cash Flow
At the end of the first quarter, cash and cash equivalents balance was $503 million compared with $385 million in the previous quarter. Long-term debt was $18.1 billion, almost flat sequentially.
The company generated $421 million in cash from operating activities and spent $117 million on capex and $43 million on distribution to minority interest and other. This resulted in free cash flow of $261 million, up 24% from $211 million in the year-ago period.
Outlook
Reiterating its earlier guidance for full-year 2017, the company continues to expect segment revenues to grow 3% to 5% and segment EBITDA to improve 5% to 7%. Similarly, adjusted EPS is still expected to grow 15% and free cash flow to stay above the $1 billion mark. Management expects the second half of the year to be stronger than the first half.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
First Data Corporation Price and Consensus
First Data Corporation Price and Consensus | First Data Corporation Quote
VGM Scores
At this time, the stock has a great Growth Score of 'A', though it is lagging a bit on the momentum front with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value and growth investors than momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.