B2B Payments

Payments Firms Remain Strong On The Street, At WEX And Elsewhere

Look beyond Apple. There are other earnings to be parsed in the tech sector, and in corporate payments, expense and fleet management and beyond, the trends are positive ones.

Card payment solution firm WEX and a number of other financial industry firms reporting earnings and other metrics showed strong numbers on Wall Street on Wednesday (April 27), indicating strength in B2B and other sectors.

On an adjusted basis, WEX, which provides fuel payment processing for fleet vehicles and other services, earned $0.96 a share, well beyond the $0.87 that had been held by consensus. In addition, the top line of just under $206 million was better than The Street at $199 million.

For the current quarter ending in July, WEX expects its per-share earnings to range from $0.96 to $1.04, while consensus was at $1.01. The stock was up 6 percent by the close of market on Wednesday, with a $4.03 consensus for the current-year lagging consensus (that’s good, of course), with management expecting $4.07 to $4.37, while sales are likely to come in at $879 million to $909 million, again better than the analysts surveyed at $879 million.

In an interview with PYMNTS, WEX CEO Melissa Smith noted that strength had come notably in the travel and corporate solution segment, wherein adjusted volumes were up 18 percent, with benefits seen across the globe for the company in terms of momentum and with the tailwind in place of additions stemming from online travel agencies, particularly with reach into Europe, Singapore (where she said WEX has established a “beachhead”) and Brazil. All in, virtual cards are being offered across 31 countries. The health and health care payments business remains strong as well.

WEX management said on the conference call with analysts that the organic growth across all segments contributed to company-wide sales up 12 percent, adjusted. Pipelines, said Smith on the call, remain “robust.”

For the fleet business, data analytics are helping to drive demand, and new products are gaining traction within the analytics space. The overall vehicle growth was 3 percent, but it was in transaction and payment processing where the segment found its greatest momentum (and where, as might be expected, low fuel prices have helped the company).

Separately, other firms found sound footing in the payments and banking spaces. Some trumpeted results through earnings reports; others had other milestones to disclose. In one example, Fifth Third Bancorp, roughly a week after its own earnings report, said on Wednesday that it extended more than $12 billion in credit (new credit and extensions) during the first quarter of this year. The recipients of that credit included insurance firms, brewers and companies in other industries. The stock barely reacted to the news, yet the credit put in place may indicate willingness, on both the part of the lender and the borrower, to commit to new business.

In another example, the small firm VersaPay, which sports a market cap of $28 million and operates in the cloud with accounts receivable and invoice management, stated that the fourth quarter results for 2015 showed revenues of $1.4 million, up 18 percent year on year to a bit above the consensus of the analysts covering the name. Chief among growth was the continued demand for invoice processing.


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