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Fiserv (FISV) Beats on Q3 Earnings, Revenues, Ups EPS View

Zacks Equity Research
·4 min read

Fiserv, Inc. FISV reported solid third-quarter 2020 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings per share of $1.20 beat the consensus mark by 4.4% and increased year over year. Adjusted revenues of $3.59 billion beat the consensus estimate by 0.9%.

Internal revenue growth was 3% in the reported quarter, backed by 6% growth in the Acceptance segment and 1% growth in the Payments segment while the Fintech segment remained flat year over year.

So far this year, shares of Fiserv have lost 13.1% against 0.7% decline of the industry it belongs to. Meanwhile, the Zacks S&P 500 composite has gained 5.8%.

 

Let’s check out the numbers in detail.

Revenues in Detail

Revenues at the Merchant Acceptance segment came in at $1.45 billion, up 43.7% year over year. Adjusted revenues of $1.46 billion grew 1.3% year over year.

Revenues at the Payments and Network segment increased 20.3% year over year to $1.39 billion. Adjusted revenues of $1.39 billion declined 0.1% year over year.

Revenues at the Financial Technology segment decreased 1.1% year over year to $727 million.

Revenues at Total processing and services segment increased 20.9% year over year to $3.15 billion while product revenues grew 21.7% year over year to $633 million.

Fiserv, Inc. Revenue (TTM)

Fiserv, Inc. Revenue (TTM)
Fiserv, Inc. Revenue (TTM)

Fiserv, Inc. revenue-ttm | Fiserv, Inc. Quote

Operating Results

Adjusted operating income of $1.18 billion was up 9.5% from the year-ago quarter. Adjusted operating margin of 32.9% grew 310 basis points (bps) year over year.

Adjusted operating income at the Merchant Acceptance segment was $425 million, up 7.9% year over year. Adjusted operating margin grew 180 bps year over year to 29.2%.

Adjusted operating income at the Payments and Network segment was $608 million, up 7.8% year over year. Adjusted operating margin improved 310 bps year over year to 43.5%.

Operating income at the Financial Technology segment totaled $265 million, up 18.8% year over year. Operating margin of 36.4% improved 600 bps.

Fiserv, Inc. Price, Consensus and EPS Surprise

Fiserv, Inc. Price, Consensus and EPS Surprise
Fiserv, Inc. Price, Consensus and EPS Surprise

Fiserv, Inc. price-consensus-eps-surprise-chart | Fiserv, Inc. Quote

Balance Sheet and Cash Flow

Fiserv exited third-quarter 2020 with cash and cash equivalents of $937 million compared with $869 million at the end of the prior quarter. Long-term debt was $20.9 billion compared with $21.5 billion at the end of the prior quarter.

The company generated $1.04 billion of net cash from operating activities in the reported quarter. Free cash flow was $939 million. Capital expenditures were $201 million.

2020 Guidance

Fiserv expects full-year 2020 adjusted earnings per share to register nearly 11% growth compared with the prior growth rate of 10%.

The company is hopeful of delivering its 35th consecutive year of double-digit adjusted earnings per share growth in 2020.

Currently, Fiserv carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Business Services Companies

Equifax EFX reported better-than-expected third-quarter 2020 results, with adjusted earnings of $1.87 per share beating the Zacks Consensus Estimate by 16.2% and improving 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.

The Interpublic Group of Companies IPG reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and improved 8.2% on a year-over-year basis.

IQVIA Holdings IQV reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and improved 1.9% on a year-over-year basis. The reported figure was above the guided range of $1.47-$1.55.

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