FleetCor Technologies, Inc. (FLT) reported second-quarter 2014 adjusted net income of $1.21 per share, beating the Zacks Consensus Estimate by a penny and increasing 72.8% year over. The performance came on the back of strong organic growth in the US and favorable impact of acquisitions.
Including amortization of intangible assets, premium on receivables deferred, financing costs and equity method investment, net income of FleetCor Technologies came in at $1.03 per share, up 18.4% year over year.
Operational Update
Adjusted revenues of FleetCor Technologies was $253.2 million, which lagged the Zacks Consensus Estimate of $273 million by 7.2%. However, results improved 26% year over year.
Including merchant commissions of $20.3 million, total revenue came in at $273.5 million, up 24% year over year.
FleetCor Technologies growth in revenues resulted from strong performance of the U.S direct business, CLC business and U.K fuel card business. The acquisitions in 2013, including VB Brazil, Epyx in the U.K. and NexTraq also contributed to the increased revenues.
Total operating expense of FleetCor Technologies was $139 million, up 24% year over year. The increase in expense was due to rise in merchant commissions, processing expenses, selling, general administrative expenses as well as depreciation and amortization expense.
Operating income increased 23.3% year over year, driven by strong revenues in the reported quarter.
FleetCor Technologies’ adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 27.2% year over year to $158 million in the reported quarter.
FleetCor Technologies’ transaction volumes increased 14% to 90.2 million, compared with 79 million transactions in the year-ago quarter. The upsurge was driven by contribution from both the segments.
Segment Details
The North America segment’s transactions rose 4% due to organic growth in the U.S. businesses and a telematics transaction completed in Oct2013.
Revenues per transaction rose 12% year over year owing to signing up of customers who use higher revenue-per-transaction products, organic growth in the higher margin products and completion of the acquisitions in 2013.
Total revenue increased 16% year over year due to the solid performance of MasterCard product in the reported quarter.
The International segment transactions grew 26% due to benefits from closure of the acquisitions in 2013.
Revenues per transaction increased 6% year over year due to organic growth in the U.K, completion of the acquisitions in 2013 and minimal impact of foreign exchange volatility.
Total revenue rose 33% year over year due to strong organic growth in the U.K. businesses, along with acquisitions in Brazil and the U.K.
Financial Update
FleetCor Technologies exited the quarter with cash and cash equivalents including restricted cash of $343.8 million, down 11% from 2013 end-level.
Total assets increased 8.2% from 2013 end level to $4.3 billion as of Jun 30, 2014.
Total stockholder’s equity rose 19% from 2013 end level to $1.5 billion as of Jun 30, 2014.
2014 Guidance Raised
FleetCor Technologies raised its 2014 guidance. The projection was revised to $1,082– $1,097 million from $1,075–$1,095 million guided earlier.
Adjusted net income is expected in the range of $432–$438 million or $5.04–$5.10 per share, higher from the previous guidance of $422–$432 million or $4.97–$5.07 per share.
Zacks Rank
FleetCor Technologies currently has a Zacks Rank #3 (Hold).
Performance of Other Competitors
Euronet Worldwide Inc. (EEFT) reported second-quarter 2014 net operating earnings of 54 cents per share, beating the Zacks Consensus Estimate of 50 cents by 8%. Results also surpassed the year-ago adjusted earnings of 44 cents by 23%.
American Express Co. (AXP) released second-quarter 2014 operating earnings per share of $1.43, which outpaced the Zacks Consensus Estimate of $1.38 by 3.6% and was higher than the year-ago quarter figure of $1.27 by 12.6%.
CIT Group Inc.'s (CIT) second-quarter 2014 earnings from continuing operations of $1.02 per share surpassed the Zacks Consensus Estimate of 86 cents on the back of higher fee income. The reported figure was also better than 87 cents earned in the year-ago quarter.
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