Euronet (EEFT) to Post Q3 Earnings: What's in the Cards?
Euronet Worldwide, Inc. EEFT is slated to report its third-quarter 2023 results on Oct 20, before the opening bell. The company’s earnings beat estimates in the last reported quarter.
What Do the Estimates Say?
The Zacks Consensus Estimate for third-quarter earnings of $2.7 per share indicates a 1.5% decrease from the year-ago quarter’s reported earnings of $2.74. The consensus estimate has witnessed no movement in the past week.
The Zacks Consensus Estimate for third-quarter revenues is pegged at around $980.3 million, suggesting an increase of 5.3% from the year-ago quarter’s reported figure.
Euronet’s earnings beat estimates in each of the trailing four quarters, the average being 7.3%. This is depicted in the graph below.
Euronet Worldwide, Inc. Price and EPS Surprise
Euronet Worldwide, Inc. price-eps-surprise | Euronet Worldwide, Inc. Quote
Before we get into what to expect for the to-be-reported quarter in detail, it is worth looking at EEFT’s previous-quarter performance.
Q2 Earnings Rewind
Euronet reported second-quarter 2023 adjusted earnings of $2.03 per share, which beat the Zacks Consensus Estimate by 1%. The bottom line climbed 17% year over year. The quarterly results benefited on the back of solid contributions from EFT Processing, epay and Money Transfer segments. Expanding physical and digital transactions, prudent cost management, a strong point-of-sale ("POS") card acquiring business and promotional activity benefits were tailwinds to EEFT’s performance.
Now let’s see how things have shaped up before the third-quarter earnings announcement.
Factors to Note
The top line of Euronet is expected to have benefited from solid contributions from EFT Processing, epay and Money Transfer segments. We expect total revenues to grow 4.8% in the third quarter of 2023.
The Zacks Consensus Estimate for third-quarter EFT revenues indicates a rise of 1.9% from the year-ago figure, whereas our estimate implies a 1.7% rise. Strong POS acquiring business and increase in cash withdrawal transactions as a result of recovery in travel is likely to have benefited third quarter numbers of this segment. Moreover, improving margins should result in an improvement in the bottom line.
The Zacks Consensus Estimate for third-quarter Epay revenues indicates a rise of 11.3% from the prior-year quarter. Expanding digital and mobile branded payments, growing digital distribution channels and strong promotional activity are likely to have benefited the third-quarter revenues.
The Zacks Consensus Estimate for the third-quarter money transfer segment’s revenues indicates an 8.9% increase from the prior-year quarter, while our estimate suggests a 12.3% increase. This segment is expected to have performed well in the third quarter due to improvements in U.S. outbound transactions and transfers initiated in the Middle East, Asia and Europe. The company’s digital growth strategy and expansion in physical location presence should further aid the results.
Nevertheless, it is probable that increased costs and expenses have impacted the profit margins in the third quarter, introducing uncertainty regarding the potential for surpassing earnings expectations. Our expectation for operating expenses stands at $832.1 million, implying an increase of 9.1% from the year-ago quarter.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Euronet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. The Most Accurate Estimate is currently pegged at $2.7 per share, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Euronet currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Euronet, here are some companies from the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Aon plc AON has an Earnings ESP of +1.61% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AON’s bottom line for the to-be-reported quarter is pegged at $2.23 per share. The consensus estimate for AON’s revenues is pegged at $2.9 billion, suggesting a 6.7% increase from a year ago.
Brown & Brown, Inc. BRO has an Earnings ESP of +4.92% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Brown & Brown’s bottom line for the to-be-reported quarter is pegged at 61 cents per share, indicating 22% year-over-year growth. The estimate remained stable over the past week. BRO beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 4%.
The Hartford Financial Services Group, Inc. HIG has an Earnings ESP of +1.61% and a Zacks Rank of 2.
The Zacks Consensus Estimate for Hartford Financial’s bottom line for the to-be-reported quarter is pegged at $1.95 per share, suggesting a 35.4% year-over-year increase. HIG beat earnings estimates in three of the past four quarters and met once, with an average surprise of 9.4%.
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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report
Aon plc (AON) : Free Stock Analysis Report
Brown & Brown, Inc. (BRO) : Free Stock Analysis Report
Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
