Earnings Still Dominate in Payments, and to the Upside

It should come as no surprise that payments earnings boosted stocks this week.  Only a few names had outsized swings, measured up or down, with one company showing a double digit percentage gain and one company showing similar declines.

The most marked percentage rise came from NCR as the stock gained 12 percent on the week, with net income of 87 cents per share besting the Street by six pennies.  The ATM maker, in the midst of transitioning to a more software oriented focus, logged growth of seven percent year over year in revenues tied to that segment, with 26 percent growth in cloud services.  Software typically carries higher margins than does hardware, NCR’s margins improved as a result, with demand pushed higher by omnichannel needs of its customers.

WEX earnings boosted stocks five percent on the week as the firm showed roughy 9.7 percent growth in payments processing volume in the third quarter, with $146 million logged in sales in that unit.  The fleet solutions segment was up nearly 30 percent through the same period. and other segments up double digits, too.

Mastercard shares were up a bit less, though earnings boosted stocks by four percent, with a third quarter report Friday that showed net revenue sup 14 percent to $2.9 billion, outpaced by net income that grew by 19 percent, and the $1.08 in eps beat the Street estimates of $0.98.  Transaction growth was up 18 percent, buoyed by 12 gains in cross-border transactions as measured by volume.

As for names that declined on a notable basis, Everi Holdings led the pack with a nearly 12 percent decline, and off a base of a $2 and change stock, of course, any movement has a strong impact on percentage gains and losses.  This time around, as has been seen in past weeks, little company specific news seemed to be driving the name, but it could be the case that investors are eyeing results due to come on Nov. 9th with some level of skittishness.

Mitek Systems, similarly, fell by nine percent, with earnings due to come this week, but with no specific news having centered around the company over the last several days.