FleetCor Technologies, Inc. (FLT) reported fourth-quarter 2014 adjusted net income of $1.31 per share, beating the Zacks Consensus Estimate by a penny or 0.77%. Results also improved 36.5% year over year. The performance came on the back of strong organic growth in the US and favorable impact of acquisitions.
Including one time item, net income of FleetCor Technologies came in at $1.21 per share, up 51.2% year over year.
Operational Update
Total revenue came in at $376.7 outperforming the Zacks Consensus Estimate of $321 million by 17.3% and improving year over year by 47.3%.
The upside was driven by a major contribution of 29% from Comdata which was acquired in Nov, 2014 as well as higher revenues in the North America segment.
Total operating expenses of FleetCor Technologies were $204.1 million, up 36.5% year over year. The increase in expenses was due to rise in merchant commissions, processing expenses, selling, general administrative expenses as well as depreciation and amortization expense.
FleetCor Technologies’ adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 61.6% year over year to $210.4 million in the reported quarter.
The company’s transaction volumes increased significantly to 379.1 million, compared with 90.1 million in the year-ago quarter. The upsurge was driven by contribution from both the segments (excluding SVS business).
Segment Details
The North America segment’s transactions rose significantly to $330.5 million compared with $42.3 million in the year-ago quarter. The upside was primarily driven by the acquisition of Comdata and organic growth in the U.S. businesses.
Excluding SVS business, revenue per transaction increased 29%. The upside was primarily due to the higher fuel spread margins during the quarter, the positive mix impact of signing up customers who use higher revenue per transaction products than the average, organic growth in many of the higher margin products and the Comdata acquisition. However, including the SVS business, revenues per transaction declined 74.8% in the reported quarter.
Total revenue increased 96.8% year over year due to the solid performance of the MasterCard product in the reported quarter.
The International segment transactions grew 1.7%, impacted by organic growth in the business.
Revenues per transaction decreased 2% 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.
Total revenue declined 0.1% year over year due to unfavorable foreign exchange rates in the quarter.
2014 Highlights
FleetCor Technologies reported full-year adjusted net income of $4.87 per share, beating the Zacks Consensus Estimate of $4.85 by 0.4% and increasing 26.5% year over year.
Including one time item, net income of FleetCor Technologies came in at $4.24 per share, up 26.2% year over year.
Total revenue of FleetCor Technologies were $1.2 billion, surpassing the Zacks Consensus Estimate of $1.1 billion by 9.1%. and improved year over year by 44%.
Financial Update
FleetCor Technologies exited the quarter with cash and cash equivalents of $477.1 million, up 41.1% from 2013 end-level.
Total assets increased significantly from $3.9 billion in 2013 to $8.7 billion as of Dec 31, 2014.
Total stockholders’ equity increased significantly from $1.2 billion in 2013 to $2.7 billion as of Dec 31, 2014.
Business Update
On Sep 26, 2014, FleetCor Technologies entered the fifth largest economy in the world – Germany – following a new outsourcing arrangement with Shell.
It also added a group of new executive talent market leaders in Brazil, Germany, Canada and the U.K.
Lastly, the company completed the Comdata acquisition in the quarter.
Fiscal Year 2015 Guidance
FleetCor Technologies expects total revenues to be in a range of $1.6–$1.65 billion.
Adjusted net income is expected in the range of $560–$580 million and adjusted net income per diluted share in the range of $5.95–$6.15.
Zacks Rank
FleetCor Technologies currently carries a Zacks Rank #3 (Hold).
Performance of Other Stocks
Visa Inc. (V) also beat fiscal first-quarter earnings estimates on improved top line across segments. The company reported operating earnings of $2.53 per share, outpacing the Zacks Consensus Estimate of $2.50 and the prior-year quarter figure of $2.20 per share.
American Express Co. (AXP) reported fourth-quarter operating earnings per share of $1.39, which surpassed the Zacks Consensus Estimate by a penny. This marked the company’s fourth consecutive earnings beat. EPS also topped the year-ago quarter figure of $1.21 by 15%. Improved card member spending was partly offset by slightly higher expenses.
Discover Financial Services (DFS) reported fourth-quarter earnings per share of $1.19 that missed the Zacks Consensus Estimate of $1.30 and lagged 3% from the year-ago quarter. Higher loan reserves and lower revenues primarily led to the decline in earnings.
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