FleetCor Technologies, Inc. (NYSE:FLT) reported second-quarter 2016 adjusted net income of $1.42 per share that missed the Zacks Consensus Estimate by 2.07%. Earnings, however, improved 2.9% year over year.
Including one-time items, net income of FleetCor Technologies came in at $1.56 per share, up 5.4% year over year.
Operational Update
Total revenue came in at $418 (465 million transaction volume) and outpaced the Zacks Consensus Estimate of $414 million by 1%. The top line also improved 3% year over year.
The upside was driven by strong organic revenue growth of approximately 9% in the quarter, on a constant fuel price, currency, and spread basis.
Total operating expense of FleetCor Technologies was $246.7 million, up 4.8% year over year. The increase in expenses was due to a rise in merchant commissions, processing expenses, selling and general administrative expenses.
FleetCor Technologies' adjusted net income increased 6% to $147.1 million in the second quarter from $138.9 million in the second quarter of 2015.
The company's transaction volumes increased to 465 million from 435.1 million in the year-ago quarter. The upsurge was driven by contribution from both North America and International.
Segment Details
The North America segment’s transactions rose significantly to $411.6 million from $389.4 million in the year-ago quarter. The upside was primarily driven by the acquisition of Comdata and organic growth in the U.S. businesses.
Net revenue increased 5.8% year over year due to the solid performance of the MasterCard product in the reported quarter.
The International segment transactions grew 16.9% on organic growth in the business.
Revenues per transaction decreased 16.7% year over year due to unfavorable foreign exchange rates, partially offset by organic revenue growth in several lines of business, particularly in the U.K.
Net revenue dipped 2.7% year over year due to unfavorable foreign exchange rates in the quarter.
Financial Update
FleetCor Technologies exited the quarter with cash and cash equivalents of $649.1 million, up 5.6% from the 2015 end-level.
Total assets increased to $8.26 billion as of Jun 30, 2016 from from $7.89 billion at 2015 end.
Total stockholders' equity increased significantly to $3.08 billion as of Jun 30, 2016 from $2.83 billion at 2015 end.
Business Update
On Aug 4, 2016, FleetCor Technologies announced the signing of a new Speedway partnership agreement with unconditional regulatory approval from CADE (The Administrative Council for Economic Defense) for the STP acquisition. The deal is expected to close in the third quarter of 2016.
On Aug 4, 2016, the company announced the acquisition of Travelcard Nederland B.V., a leading universal fuel card issuer in the Netherlands, from LeasePlan Corporation.
2016 Guidance
FleetCor Technologies expects total revenue to be in a range of $1.7–$1.8 billion.
Adjusted net income is expected in the range of $627–$640 million and adjusted net income per diluted share in the range of $6.61–$6.75.
Zacks Rank
FleetCor Technologies currently carries a Zacks Rank #2 (Buy).
FLEETCOR TECH Price, Consensus and EPS Surprise
FLEETCOR TECH Price, Consensus and EPS Surprise | FLEETCOR TECH Quote
Performance of Other Stocks
Among the other players in the financial services industry that have reported their second-quarter results so far, the bottom line at Visa Inc. (NYSE:V) , American Express Company (NYSE:AXP) , and Discover Financial Services (NYSE:DFS) beat their respective Zacks Consensus Estimate.
DISCOVER FIN SV (DFS): Free Stock Analysis Report
AMER EXPRESS CO (AXP): Free Stock Analysis Report
FLEETCOR TECH (FLT): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
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