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Euronet (EEFT) Q3 Earnings Surpass Estimates, Decline Y/Y

Euronet Worldwide, Inc. EEFT reported third-quarter 2020 earnings of $1.12 per share, beating the Zacks Consensus Estimate by 115.4% on the back of epay and Money Transfer segments. However, the bottom line fell 61% year over year due to reduced revenues.

The company’s net income of 76 cents per share in the third quarter compared unfavorably with the net income of $2.46 in the prior-year quarter.

Total revenues of $664.4 million were down 16% from the year-ago quarter.
However, the top line beat the Zacks Consensus Estimate by 8.7%.

Operating income of $66.1 million in the third quarter plunged 66% year over year.

Total operating expenses of $598.3 million were up 0.9% year over year due to higher direct operating costs.

Segmental Results

EFT Processing Segment’s total revenues slumped 54% (down 55% in constant currency) year over year due to lower high-value cross-border transactions in Europe and the Asia Pacific related to the coronavirus pandemic. Adjusted EBITDA of ($27.7) million dropped 84% (down 84% at cc) from the year-ago period. Operating income of $6.2 million tanked 96% year over year.

The epay Segment’s total revenues inched up 4% year over year to $198.9 million (up 3% on constant currency basis) on the back of digital media and mobile growth. Adjusted EBITDA amounted to $24.3 million, increasing 12% from the year-earlier figure (up 11% on constant currency basis). Operating income of $22.2 million improved 10% year over year (up 9% on constant currency basis). Reported transactions were 661 million, up 66% year over year owing to better numbers across Europe and Brazil as well as robust contributions from India.

The Money Transfer Segment’s total revenues increased 15% (up 13% at cc) year over year to $323.1 million. Adjusted EBITDA amounted to $57.8 million, reflecting a 32% increase (30% rise at cc) from the prior-year quarter. Operating income of $47.6 million rose 34% year over year (31% at cc). This segment’s total transactions of 30.9 million were up 5% year over year.

Corporate and Other Segment reported an expense of $9.9 million for the quarter, down 21.4% year over year.

Financial Update

Total assets at the third-quarter end were $4 billion, down 12.1% from the level at 2019 end.

Cash and cash equivalents increased 28.3% to $1 billion from the figure at 2019 end.

Debt obligations, net of current portion, were up 3.9% year over year to $1.1 billion from the level at 2019 end.

Zacks Rank and Performance of Other Players

Euronet currently carries a Zacks Rank #4 (Sell).

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

Of the other companies in the same space that already reported third-quarter earnings, the bottom-line results of American Express Company AXP and Synchrony Financial SYF missed the respective Zacks Consensus Estimate while that of Discover Financial Services DFS beat the same.

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