Post Earnings Coverage as Fiserv’s Q4 Profit Outshined Market Forecasts

Upcoming AWS Coverage on Priceline Group Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 28, 2017 / Active Wall St. announces its post-earnings coverage on Fiserv, Inc. (NASDAQ: FISV). The Company announced its financial results for the fourth quarter fiscal 2016 (Q4 FY16) and full year 2016 (FY16) on February 08, 2017. The Brookfield, Wisconsin-based Company’s quarterly adjusted diluted EPS grew 16% y-o-y; topping Wall-Street’s estimates. Register with us now for your free membership at:

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One of Fiserv’s competitors within the Business Services space, The Priceline Group Inc. (NASDAQ: PCLN), reported its fourth quarter 2016 financial results on Monday, February 27, 2017. AWS will be initiating a research report on Priceline Group in the coming days.

Today, AWS is promoting its earnings coverage on FISV; touching on PCLN. Get our free coverage by signing up to:

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Earnings Reviewed

During the quarter ended on December 31, 2016, Fiserv reported GAAP revenues of $1.43 billion, increasing 5% from $1.37 billion recorded at the end of Q4 FY15. However, GAAP revenue numbers for the reported quarter lagged behind market expectations of $1.48 billion. The GAAP revenue growth was driven by driven by 7% y-o-y growth in the Payments segment and 2% y-o-y in the Financials segment. Furthermore, the Company’s adjusted revenue also increased 5% y-o-y during Q4 FY16 to $1.35 billion, while internal revenue growth during the reported quarter was 4% y-o-y.

The Financials services technology Company reported GAAP net income of $215 million, or $0.98 per diluted share, in Q4 FY16 compared to $189 million, or $0.81 per diluted share, in Q4 FY15. The Company’s adjusted net income increased to $254 million, or $1.16 per diluted share, in Q4 FY16 from $233 million, or $1.00 per diluted share, in Q4 FY15. Meanwhile, Wall Street had also expected the Company to report adjusted net income of $1.16 per diluted share.

Fiserv’s revenues during full year FY16 came in at $5.51 billion compared to $5.25 billion in FY15. The Company’s adjusted revenue rose 5% during FY16 to $5.21 billion from $4.95 billion in FY15. Fiserv’s GAAP net income rose to $930 million, or $4.15 per diluted share, in FY16 from $712 million, or $2.99 per diluted share, in FY15. Additionally, adjusted net income for FY16 came in at $993 million, or $4.43 per share, versus $921 million, or $3.87 per share, in FY15.

Operational Metrics

During Q4 FY16, Fiserv’s total expenses were $1.06 billion compared to $1.04 billion in the prior year’s same quarter. The Company’s operating income increased during Q4 FY16 to $375 million from $329 million in Q4 FY15. The Company’s operating margin also rose to 26.1% in Q4 FY16 from 24.0% in the previous year’s comparable quarter. In the reported quarter, adjusted operating income was up to $435 million from $394 million in Q4 FY15. Furthermore, adjusted operating margin improved to 32.1% in Q4 FY16 from 30.7% in Q4 FY15.

Segment Performance

For Q4 FY16, Payments and Industry Products (Payments) segment reported revenues of $806 million compared to $751 million in Q4 FY15. The segment’s adjusted revenue increased to $728 million in Q4 FY16 from $666 million in the prior year’s corresponding quarter. For the reported quarter, the segment’s operating income came in at $240 million, or 29.8% of the segment’s revenues, compared to $224 million, or 29.8% of the segment’s revenues in Q4 FY15. Additionally, the segment’s Q4 FY16 adjusted operating income stood at $241 million, or 33.1% of the adjusted segment’s revenues, compared to $224 million, or 33.6% of the adjusted segment’s revenues in Q4 FY15.

Financial Institution Services (Financial) segment contributed $643 million to total revenues during Q4 FY16 compared to $630 million in Q4 FY15. The segment’s adjusted revenue rose to $644 million in Q4 FY16 from $631 million in the year ago same quarter. Furthermore, the segment’s operating income for the reported quarter stood at $217 million, or 33.7% of the segment’s revenues, versus $195 million, or 31.0% of the segment’s revenues, in Q4 FY15.

Cash Flow & Balance Sheet

During FY16, Fiserv generated $1.43 billion of cash from its operating activities compared to $1.35 billion during FY15. The Company reported free cash flow of $1.08 billion in FY16, up from $1.01 billion in FY15. At the close of books in the reported quarter, Fiserv had $300 million in cash and cash equivalents compared to $275 million at the close of books on December 31, 2015. Additionally, the Company’s long-term debt increased to $4.47 billion on December 31, 2016, from $4.29 billion on December 31, 2015.

Share Repurchase

In Q4 FY16, Fiserv repurchased 2.6 million shares of common stock for $265 million, totaling repurchase of 11.9 million shares of common stock for $1.20 billion in full year FY16. Furthermore, the Company announced a new 15 million share repurchase authorization in Q4 FY16 and has 20.5 million remaining shares repurchase authorization as on December 31, 2016.

Earnings Guidance

In its guidance for full year FY17, Fiserv’s management expects internal revenue to grow in a range of 4% to 5%. The Company anticipates adjusted EPS during FY17 to be in the range of $5.03 per share to $5.17 per share with a growth range of 14% to 17% y-o-y.

Stock Performance

On Monday, February 27, 2017, the stock closed the trading session at $115.58, marginally falling 0.62% from its previous closing price of $116.30. A total volume of 1.19 million shares have exchanged hands, which was higher than the 3-month average volume of 986.91 thousand shares. Fiserv’s stock price advanced 7.42% in the last three months, 12.19% in the past six months, and 17.96% in the previous twelve months. Furthermore, on a year-to-date basis, the stock gained 8.75%. Shares of the company have a PE ratio of 27.85 and have a market capitalization of $25.01 billion.

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