Fiserv (FI) Q3 Earnings and Revenues Surpass Estimates
Fiserv, Inc. FI reported impressive third-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share (excluding 40 cents from non-recurring items) of $1.96 exceeded the consensus mark by 1% and increased 20% year over year. Adjusted revenues of $4.62 billion surpassed the consensus estimate by 0.53% and rose 8.2% year over year.
Organic revenue growth was 12% in the quarter, driven by 20% and 6% growth in the Acceptance and Payments segments, respectively.
Other Quarterly Details
Processing and services’ revenues of $4 billion increased 8.7% year over year and beat our estimate by 2.3%. Revenues in the Product segment were $865 million, up 3% year over year but missing our estimated $901.6 million.
Fiserv, Inc. Price, Consensus and EPS Surprise
Fiserv, Inc. price-consensus-eps-surprise-chart | Fiserv, Inc. Quote
Revenues from Merchant Acceptance were $2.11 billion, up 12.2% from the year-ago figure, beating our estimate by 4.5%. The Fintech segment reported revenues of $795 million, indicating a 3.8% rise from our estimate. The Payments segment reported revenues of $1.71 billion, reflecting growth of 5.6%. The figure compares with our estimated $1.7 billion.
The operating margin from the Merchant acceptance segment was 35.9%, up from the yea-r-ago figure of 32.4% and our estimated 35.2%. Adjusted operating margin from the Payments segment was 48.6% compared with the year-ago figure of 45.9% and surpassed our estimated 42%. Operating margin from the Fintech segment was 36.7%, up 260 basis points from the year-ago figure.
Balance Sheet and Cash Flow
Fiserv exited the third quarter of 2023 with cash and cash equivalents of $1.35 billion. Long-term debt was $21.9 billion. FISV generated $1.55 billion in net cash from operating activities, while free cash flow was $1.25 billion. Capital expenditures were $355 million. The company repurchased 9.6 million shares for $1.2 billion in the quarter.
2023 Guidance
Adjusted earnings per share are anticipated to be in the range of $7.47-$7.52, raised from prior guidance of EPS of $7.4-$7.5. The Zacks Consensus Estimate of earnings is pegged at $7.45 per share, lower than the guided range. The company anticipates the EPS growth to be in the band of 15-16%. FI expects total revenues to grow by 7.5% while organic revenues are expected to grow 11% year over year.
Fiserv currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot of Peers
The Interpublic Group of Companies, Inc.’s IPG third-quarter 2023 earnings and revenues missed the Zacks Consensus Estimate. Adjusted earnings (considering 7 cents from non-recurring items) were 70 cents per share, which lagged the consensus estimate by 6.7%, but increased 11.1% on a year-over-year basis. Net revenues of $2.31 billion missed the consensus estimate by 3.3%. In the year-ago quarter, IPG’s net revenues were $2.3 billion. Total revenues of $2.68 billion increased 1.5% year over year.
Equifax Inc. EFX reported lower-than-expected third-quarter 2023 results. Adjusted earnings (excluding 45 cents from non-recurring items) were $1.76 per share, missing the Zacks Consensus Estimate by 1.1%, but increasing 1.7% from the year-ago figure. Total revenues of $1.32 billion missed the consensus estimate by 0.7% and increased 6% from the year-ago figure on a reported basis and 6.5% on a local-currency basis.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Interpublic Group of Companies, Inc. (The) (IPG) : Free Stock Analysis Report
Equifax, Inc. (EFX) : Free Stock Analysis Report
Fiserv, Inc. (FI) : Free Stock Analysis Report
