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Fiserv (FISV) Q4 Earnings In Line, Revenues Miss Estimates (revised)

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Fiserv Inc. 's FISV fourth-quarter 2015 adjusted earnings from continuing operations of $1.00 per share came in line with the Zacks Consensus Estimate while it improved 12.4% from year-ago quarter

Fiserv Inc. (FISV) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

Total revenues increased 4% year over year to $1.368 billion but missed the Zacks Consensus Estimate of $1.395 billion.

Adjusted revenues (including the impact of Output Solutions postage reimbursements and Open Solutions deferred revenue adjustment) grew 4.6% year over year to $1.284 billion.

Segment-wise, Payments and Industry Products adjusted revenues increased 5.7% year over year to $666 million. Financial Institution Services revenues were up 3.4% year over year to $631 million.

Internal revenues rose 5% driven by growth in Payments (up 6%) and Financial (up 4%) segments. Foreign currency negatively impacted internal revenue growth by about 50 basis points (bps) in the quarter.

Source-wise, total Processing and services revenues increased 3% on a year-over-year basis to $1.110 billion and Product revenues increased 8.4% year over year to $258 million.

For the full year, adjusted earnings per share came in $3.87 per share, up 14.8% year over year while revenues grew 3.7% to $5.254 billion. Adjusted revenues grew 4.3% to $4.945 billion.

Margins

Adjusted operating income increased to $394 million, up 4.8% from $376 million in the year-ago quarter. The company's adjusted operating margin of 30.7% increased 10 bps on a year-over-year basis.

Total expenses amounted to $1.039 billion, up 4% year over year.

Other Financial Details

As of Dec 31, 2015, Fiserv had cash and cash equivalents of $275 million compared with $294 million as on Dec 31, 2014. Fiserv's cash from operating activities for the year ended Dec 31, 2015 was $1.346 billion, up nearly 3% from the prior-year period. The company's free cash flow came in at $1.006 billion, an increase of 4.3% on a year-over-year basis.

Long-term debt at year end was $4.288 billion, up 16% from 2014 levels.

Fiserv repurchased 17.4 million shares for $1.47 billion in 2015. In the fourth quarter, the company authorized a new 15 million share buyback plan. Fiserv had 17.4 million shares remaining for buyback as of Dec 31, 2015.

Guidance

For 2016, Fiserv projected adjusted earnings per share in a range of $4.32 to $4.44, representing 12% to 15% growth over 2014 levels. It expects adjusted internal revenues to increase 5% to 6%.

Our Take

Fiserv has expanded its foothold in the financial and payment solutions business supported by its broad customer base and various contract wins. Additionally, Fiserv continues to add retail and business clients to its Mobiliti ASP solutions, which are expected to drive growth.

However, tightening regulations in the banking and financial services industry are expected to remain a concern going ahead. We also believe that intensifying competition from the likes of Equifax Inc. EFX , Fidelity National Information Services, Inc. FIS and Global Payments Inc. GPN remains a concern.

Currently, Fiserv has a Zacks Rank #3 (Hold).

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(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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