BOSTON (AP) -- Shares of Fidelity National Information Services Inc. surged on Tuesday to their highest this year after the banking and payments technology company reported third-quarter earnings and announced a contract extension with a long-time bank client.
THE SPARK: Fidelity National, which goes by the name FIS, reported quarterly results after markets closed on Monday. The Jacksonville, Fla.-based company reported net income of $86.8 million, or 29 cents per share, down sharply from $136.3 million, or 44 cents per share, in the year-ago quarter.
Excluding one-time items, FIS' adjusted earnings in the latest quarter amounted to $187.5 million, or 63 cents per share. That matched the consensus forecast of analysts surveyed by FactSet.
Revenue rose 2.8 percent to nearly $1.437 billion, slightly lower than analysts' expectations for $1.442 billion.
Separately, Fidelity said on Monday that it has signed a new five-year agreement with long-time client BMO Harris Bank.
THE ANALYSIS: Raymond James analyst Wayne Johnson reiterated an "Outperform" rating for the stock and said in a note to clients that FIS "continues to execute well in a tough environment." He noted that growth in the value of FIS' contracts was running ahead of last year's pace, and said the contract expansion with BMO Harris improves the outlook for FIS.
Sterne Agee & Leach Equity Research analysts Greg Smith and Jennifer Dugan said that it was a solid quarter for FIS. They cited the news about BMO Harris in lifting their 2013 and 2014 earnings estimates for FIS. They have a "Buy" rating on the stock.
SHARE ACTION: Shares of FIS added $1.65, or 5 percent, to $34.93 in afternoon trading after rising as high as $35.44 earlier in the session, its highest level this year.