Investments

Slight Downside To Payments Stocks As Q1 2017 Earnings Reports Continue

For Q1 2017, movement was a bit to the downside amid continued earnings reports this past week, as has been seen in previous sessions. The biggest decline came from Cardtronics, as the firm’s stock lost nearly 15 percent. The ATM operator saw its first leg down Thursday (May 4), with an 11 percent slip in the wake of an earnings report that was mixed, as top-line numbers came in ahead of the Street, yet the bottom line was below consensus.

Revenues were $357.6 million, with a 22 percent gain over the first quarter of last year and $8 million better than the Street. But below the headline number, ATM operating sales in the North America region were down 1 percent over the same timeframe. Adjusted earnings per share at $0.55 were eight pennies below the Street.  Software and systems conversions weighed on the quarter, said management.

FleetCor dropped significantly, too, though by a lesser amount, by 9.4 percent. The stock seemed to be swayed less by earnings anticipation than by the announcement that the firm had agreed to buy Cambridge Global Payments, which focuses on B2B transactions, for $675 million. The firms said that FleetCor would seek to bring its virtual payments solutions (FleetCor’s main businesses have been in payroll solutions and fleet cards) to Cambridge.

ACI Worldwide shares gained 8.7 percent to $23.40, after the company stated that its adjusted net income was $0.02, which was better than the $0.09 a share loss the Street had expected. Revenues of $231 million bested the Street at $218 million and was 10 percent higher than last year. Management singled out eCommerce as a driver of results and a business segment seen picking up momentum and affirmed full-year guidance.

Square shares surged on that company’s earnings beat last week, as the stock was up 6.4 percent. The $461 million in sales was better than the roughly $451 million expected, while that number was up nearly 22 percent year on year. The gross payments volume was up at an even more accelerated rate, at 33 percent to $13.6 billion. But it was subscription services that may have lifted investors’ enthusiasm, growing at more than 100 percent year over year to $49 million.

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