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FLEETCOR (FLT) Q2 Earnings & Revenues Beat, 2019 View Up

Zacks Equity Research

FLEETCOR Technologies, Inc. FLT reported strong second-quarter 2019 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate. In response to the better-than-expected results, shares of the company were up 2.3% in after-hours trading yesterday.

Adjusted earnings of $2.85 per share outpaced the consensus estimate by 6 cents and increased 10.9% year over year. Notably, the reported figure exceeded the company guided range of $2.74-$2.84 per share.

Revenues of $647.1 million beat the consensus mark by $13 million and increased 10.6% year over year on a reported basis and 13% on a pro-forma and macro-adjusted basis.

Organic revenue growth was 13% in the reported quarter, driven by solid double-digit growth across the company’s product categories – fuel, corporate payments, tolls and lodging. Its fuel card business was up 9%, corporate payments increased 26%, toll business grew 17% and lodging business increased 13% organically.

Recently, the company completed the acquisition of SOLE Financial, a payroll card provider, which is expected to enhance FLEETCOR’s payroll card business.

So far this year, shares of FLEETCOR have gained 45% compared with 32.8% rise of the industry it belongs to and 12.2% increase of the Zacks S&P 500 composite.

 

Let's check out the numbers in detail.

Revenues in Detail

Segment-wise, revenues from North America came in at $417.94 million, up 12.7% year over year. Internationally, revenues of $229.15 million increased 7.1% year over year.

Product category-wise, fuel revenues of $295.1 million increased 6% year over year on a reported basis and 9% on a pro-forma and macro-adjusted basis.

Corporate Payments revenues of $127.1 million increased 28% year over year on a reported basis and 26% on a pro-forma and macro-adjusted basis.

Tolls revenues of $86.2 million improved 8% year over year on a reported basis and 17% on a pro-forma and macro-adjusted basis.

Lodging revenues of $50.2 million increased 13% year over year on a reported basis as well as on a pro-forma and macro-adjusted basis.

Gift revenues of $35.7 million increased 7% year over year on a reported basis and 2% on a pro-forma and macro-adjusted basis.

Other revenues of $52.7 million increased 7% year over year on a reported basis and 8% on a pro-forma and macro-adjusted basis.

FleetCor Technologies, Inc. Revenue (TTM)

 

FleetCor Technologies, Inc. Revenue (TTM)

FleetCor Technologies, Inc. revenue-ttm | FleetCor Technologies, Inc. Quote

Operating Results

Operating income increased 12.3% from the prior-year quarter to $297.32 million. Operating income margin rose to 45.9% from 45.2% in the prior-year quarter.

FleetCor Technologies, Inc. Price, Consensus and EPS Surprise

 

FleetCor Technologies, Inc. Price, Consensus and EPS Surprise

FleetCor Technologies, Inc. price-consensus-eps-surprise-chart | FleetCor Technologies, Inc. Quote

Balance Sheet & Cash Flow

FLEETCOR exited second-quarter 2019 with cash, cash equivalents and restricted cash of approximately $1.49 billion compared with $1.37 billion at the end of the prior quarter.

The company generated $252.53 million of net cash from operating activities. Capital expenditures totaled $17.47 million. In the reported quarter, FLEETCOR repurchased shares worth $702 million.

Q3 Guidance

For third-quarter 2019, the company expects adjusted earnings to be in the range of $3.00-$3.10 per share. The current Zacks Consensus Estimate of $3.04 lies within the guided range.

2019 Guidance

For 2019, FLEETCOR raised its revenue and adjusted earnings guidance while reaffirming the same for organic revenue growth, adjusted tax rate and interest expense.

Total revenues are now anticipated in the range of $2.63-$2.68 billion compared with the previously guided range of $2.60-$2.66 billion. The current Zacks Consensus Estimate of $2.63 billion is line with the lower end of the upgraded guided range.

Adjusted earnings are now expected in the range of $11.53-$11.83 per share compared with the prior guided range of $11.47-$11.77 per share. The current Zacks Consensus Estimate of $11.67 lies within the recently guided range.

The company continues to expect organic revenues to register 9-11% growth. Adjusted tax rate is anticipated between 23% and 24%. Interest expense is estimated between $150 - $160 million.

Zacks Rank & Upcoming Releases

FLEETCOR currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting second-quarter 2019 results of key players like MAXIMUS MMS, Navigant Consulting NCI and Parsons PSN. While MAXIMUS and Navigant Consulting are scheduled to release results on Aug 8, Parsons is slated to report on Aug 13.

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