A month has gone by since the last earnings report for FleetCor Technologies (FLT). Shares have added about 2.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is FleetCor Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
FLEETCOR Tops Q3 Earnings & Revenues Estimates
FLEETCOR Technologies reported strong third-quarter 2019 results wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings of $3.10 per share outpaced the consensus estimate by 5 cents and increased 15.7% year over year. Notably, the reported figure came in line with the higher end of the guided range of $3.00-$3.10.
Revenues of $681.05 million beat the consensus mark by $0.9 million and increased 10% year over year on a reported basis and 11% on a pro-forma and macro-adjusted basis.
Organic revenues rose 11% in the reported quarter, driven by solid double-digit growth across the company’s product categories namely fuel, corporate payments, tolls and lodging. Its fuel card business was up 10%, corporate payments increased 24%, toll business grew 17% and lodging business increased 17% organically.
Revenues in Detail
Segment-wise, revenues from North America came in at $442.70 million, up 7.2% year over year. Internationally, revenues of $238.34 million increased 15.3% year over year.
Product category-wise, fuel revenues of $295.6 million increased 4% year over year on a reported basis and 10% on a pro-forma and macro-adjusted basis.
Corporate Payments revenues of $138.5 million increased 31% year over year on a reported basis and 24% on a pro-forma and macro-adjusted basis.
Tolls revenues of $88.7 million improved 16% year over year on a reported basis and 17% on a pro-forma and macro-adjusted basis.
Lodging revenues of $56.4 million increased 17% year over year on a reported basis as well as on a pro-forma and macro-adjusted basis.
Gift revenues of $48.5 million decreased 14% year over year on a reported basis and 16% on a pro-forma and macro-adjusted basis.
Other revenues of $53.4 million increased 7% year over year on a reported basis as well as on a pro-forma and macro-adjusted basis.
Operating income increased 17.1% from the prior-year quarter to $329.14 million. Operating income margin rose to 48.3% from 45.4% in the prior-year quarter.
Balance Sheet & Cash Flow
FLEETCOR exited third-quarter 2019 with cash, cash equivalents and restricted cash of approximately $1.47 billion compared with $1.49 billion at the end of the prior quarter.
The company generated $241.11 million of net cash from operating activities. Capital expenditures totaled $16.71 million.
In the reported quarter, FLEETCOR repurchased nearly 184,000 shares for $55 million and has $489 million available under its current authorization. The company’s board of directors authorized an additional $1 billion increase in its previously announced share repurchase program and extended the program by three years. Considering the company’s $1.611 billion of previous repurchases, it can now repurchase up to $1.489 billion by Feb 1, 2023.
For 2019, FLEETCOR updated its revenue and adjusted earnings guidance. Total revenues are now anticipated in the range of $2.64-$2.66 billion compared with the previously guided range of $2.63-$2.68 billion. Adjusted earnings are now expected in the range of $11.68-$11.78 per share compared with the prior guided range of $11.53-$11.83 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
Currently, FleetCor Technologies has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, FleetCor Technologies has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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