Fiserv (FISV) Misses on Q3 Earnings, Alters 2022 Guidance

Fiserv, Inc. FISV reported mixed third-quarter 2022 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.

Adjusted earnings (excluding 89 cents from non-recurring items) per share of $1.63 missed the consensus mark by 4.1% but increased 11% year over year. Adjusted revenues of $4.27 billion beat the consensus estimate by 0.2% and increased 2.6% year over year.

Organic revenue growth was 11% in the quarter, driven by 14% growth in the Acceptance segment, 1% growth in the Fintech segment and 11% growth in the Payments segment.

Shares of Fiserv have inched up 0.5% over the past year against the 19.9% decrease of the industry it belongs to.

Image Source: Zacks Investment Research

Other Quarterly Details

Processing and services revenues of $3.7 billion increased 8.8% year over year. Product revenues of $840 million were up 11.1% year over year.

Revenues at the Merchant Acceptance segment came in at $1.87 billion, up 8.2% year over year. Revenues at the Financial Technology segment increased marginally year over year to $766 million. Revenues at the Payments and Network segment increased 10.2% year over year to $1.62 billion. Adjusted revenues in the segment increased 9.6% year over year.

Adjusted operating income of $744 million was up 14.5% from the year-ago quarter’s level. Adjusted operating margin of 45.9% expanded 190 basis points year over year.

Fiserv, Inc. Price, Consensus and EPS Surprise

Fiserv, Inc. price-consensus-eps-surprise-chart | Fiserv, Inc. Quote

Balance Sheet and Cash Flow

Fiserv exited the quarter with cash and cash equivalents of $893 million compared with $883 million at the end of the prior quarter. Long-term debt was $20.8 billion compared with $20.9 billion at the end of the prior quarter.

FISV generated $1180 million of net cash from operating activities, while free cash flow was $849 million. Capital expenditures were $430 million. FISV repurchased 7.6 million shares for $750 million in the quarter.

2022 Guidance

Adjusted earnings per share are now anticipated in the range of $6.48-$6.55 (prior view: $6.45-$6.55). The Zacks Consensus Estimate of $6.48 matches the lower end of the guided range. FISV now expects organic revenue growth of 16-17% (prior view: 9-11%).

Currently, Fiserv carries a Zacks Rank #4 (Sell).

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

Recent Releases

Omnicom Group Inc. OMC reported impressive third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Earnings of $1.77 per share beat the consensus mark by 7.9% and increased 7.3% year over year, driven by a strong margin performance. Total revenues of $3.4 billion surpassed the consensus estimate by 3% and increased slightly year over year.

Equifax Inc. EFX reported stellar third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Adjusted earnings (excluding 39 cents from non-recurring items) of $1.73 per share beat the Zacks Consensus Estimate by 5.5% but decreased 6.5% on a year-over-year basis. However, revenues of $1.24 billion beat the consensus estimate by 2.3% and improved 1.8% year over year on a reported basis and 4% on a local-currency basis.   

The Interpublic Group of Companies, Inc. IPG reported better-than-expected third-quarter 2022 results.

Adjusted earnings (excluding a penny from non-recurring items) of 63 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line has been constant over the past year. Net revenues of $2.3 billion beat the consensus estimate by 0.3% but declined 9.7% on a year-over-year basis. Total revenues of $2.64 billion increased 3.8% year over year.
 

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