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Fidelity National Information Services’ (FIS - Free Report) first-quarter 2020 adjusted earnings per share from continuing operations were $1.28, surpassing the Zacks Consensus Estimate by a penny. Also, the bottom line compared favorably with the year-ago quarter figure of $1.16.
Organic revenue growth and expanding margin were the key tailwinds. Also, strong liquidity position aided. However, a significant rise in expenses posed a key concern.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $15 million or 2 cents per share compared with $148 million or 45 cents in the prior-year quarter.
Organic Revenues Increase, Expenses Flare Up
GAAP revenues in the quarter were $3.08 billion, up 50% year over year. The figure met the Zacks Consensus Estimate.
Organic revenues went up nearly 2% in the quarter.
Selling, general and administrative expenses were $881 million, up significantly year over year.
Segment wise, Merchant Solutions’ GAAP revenues grew to $935 million from $50 million in the year-ago quarter. Revenues from Banking Solutions rose 6% to $1.46 million. Capital Market Solutions’ revenues climbed 10% to $631 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased to $1.25 billion from $729 million in the year-ago quarter. Adjusted EBITDA margin expanded 510 basis points to 40.5%.
Balance Sheet & Cash Flow
As of Mar 31, 2020, cash and cash equivalents were $1.37 billion compared with $1.15 billion as of Dec 31, 2019. Debt outstanding was $20.4 billion.
In the first quarter, net cash provided by operations was $383 million and free cash flow nearly doubled from the prior-year quarter to $539 million.
The company paid out dividends worth $216 million in the reported quarter.
Our Viewpoint
Fidelity reported a decent quarter, with higher organic revenues and strong liquidity position. The company enjoys a dominant position in financial and payments solutions business, backed by a robust product portfolio. Notably, the merger of Fidelity and Worldpay will provide clients of both organizations access to a wider portfolio of digital assets for accelerating revenue growth.
However, increasing consolidation in the banking sector, a challenging environment for the Payments Solutions business and an uncertain regulatory environment are key headwinds.
Fidelity National Information Services Inc Price, Consensus and EPS Surprise
LendingTree (TREE - Free Report) reported first-quarter 2020 adjusted net income per share of $1.20, beating the Zacks Consensus Estimate of $1.09. Further, the figure was higher than the prior-year quarter’s $1.10 per share.
Hercules Capital Inc.’s (HTGC - Free Report) first-quarter 2020 net investment income of 37 cents per share outpaced the Zacks Consensus Estimate by a penny. The bottom line also grew 23.3% from the year-ago reported figure.
Ares Capital Corporation’s (ARCC - Free Report) first-quarter 2020 core earnings of 41 cents per share missed the Zacks Consensus Estimate of 43 cents. Also, the bottom line declined 14.6% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Fidelity (FIS) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Fidelity National Information Services’ (FIS - Free Report) first-quarter 2020 adjusted earnings per share from continuing operations were $1.28, surpassing the Zacks Consensus Estimate by a penny. Also, the bottom line compared favorably with the year-ago quarter figure of $1.16.
Organic revenue growth and expanding margin were the key tailwinds. Also, strong liquidity position aided. However, a significant rise in expenses posed a key concern.
On a GAAP basis, the company reported net earnings attributable to common stockholders of $15 million or 2 cents per share compared with $148 million or 45 cents in the prior-year quarter.
Organic Revenues Increase, Expenses Flare Up
GAAP revenues in the quarter were $3.08 billion, up 50% year over year. The figure met the Zacks Consensus Estimate.
Organic revenues went up nearly 2% in the quarter.
Selling, general and administrative expenses were $881 million, up significantly year over year.
Segment wise, Merchant Solutions’ GAAP revenues grew to $935 million from $50 million in the year-ago quarter. Revenues from Banking Solutions rose 6% to $1.46 million. Capital Market Solutions’ revenues climbed 10% to $631 million.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased to $1.25 billion from $729 million in the year-ago quarter. Adjusted EBITDA margin expanded 510 basis points to 40.5%.
Balance Sheet & Cash Flow
As of Mar 31, 2020, cash and cash equivalents were $1.37 billion compared with $1.15 billion as of Dec 31, 2019. Debt outstanding was $20.4 billion.
In the first quarter, net cash provided by operations was $383 million and free cash flow nearly doubled from the prior-year quarter to $539 million.
The company paid out dividends worth $216 million in the reported quarter.
Our Viewpoint
Fidelity reported a decent quarter, with higher organic revenues and strong liquidity position. The company enjoys a dominant position in financial and payments solutions business, backed by a robust product portfolio. Notably, the merger of Fidelity and Worldpay will provide clients of both organizations access to a wider portfolio of digital assets for accelerating revenue growth.
However, increasing consolidation in the banking sector, a challenging environment for the Payments Solutions business and an uncertain regulatory environment are key headwinds.
Fidelity National Information Services Inc Price, Consensus and EPS Surprise
Fidelity National Information Services Inc price-consensus-eps-surprise-chart | Fidelity National Information Services Inc Quote
Fidelity currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
LendingTree (TREE - Free Report) reported first-quarter 2020 adjusted net income per share of $1.20, beating the Zacks Consensus Estimate of $1.09. Further, the figure was higher than the prior-year quarter’s $1.10 per share.
Hercules Capital Inc.’s (HTGC - Free Report) first-quarter 2020 net investment income of 37 cents per share outpaced the Zacks Consensus Estimate by a penny. The bottom line also grew 23.3% from the year-ago reported figure.
Ares Capital Corporation’s (ARCC - Free Report) first-quarter 2020 core earnings of 41 cents per share missed the Zacks Consensus Estimate of 43 cents. Also, the bottom line declined 14.6% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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