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WEX Beats on Q2 Earnings and Revenues, Raises FY22 View

Zacks Equity Research
·4-min read

WEX Inc. WEX delivered better-than-expected second-quarter 2022 results.

Adjusted earnings of $3.71 per share surpassed the Zacks Consensus Estimate by 8.5% and increased 60.6% year over year.

Total revenues of $598.2 million surpassed the consensus mark by 5.2% and increased 30.2% year over year, mainly driven by an increase in volumes from customer wins and renewals.

WEX’s shares have declined 12.6% in the past year compared with a 31.6% decline in the industry it belongs to.

Quarter Details

Fleet Solutions’ revenues were up 38% year over year to $379.2 million. Travel and Corporate Solutions’ revenues of $100.4 million were up 23% year over year. Health and Employee Benefit Solutions’ revenues of $118.6 million registered 15% year-over-year growth.

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Total volume across the company came in at $56.6 billion, up 60% year over year. The average number of vehicles serviced was 17.5 million, up 8% from the year-ago quarter’s figure. Fleet Solutions segment payment processing transactions were up 10% year over year to 143.2 million.

Travel and Corporate Solutions' purchase volume climbed 96% year over year to $17.1 billion. Health and Employee Benefit Solutions' average number of Software-as-a-Service accounts in the U.S. were up 7% to 17.6 million, year over year.

Adjusted operating income increased 47.9% to $272.3 million from the year-ago quarter’s $184.1 million. Adjusted operating income margin was 42.3% compared with 36.3% in the year-ago quarter.

Balance Sheet

WEX exited the quarter with a cash and cash equivalents balance of $438.8 million compared with $577.5 million witnessed at the end of the prior quarter. Long-term debt was $2.8 billion compared with $2.7 billion at the end of the previous quarter.

Guidance

For the third quarter of 2022, WEX anticipates revenues in the range of $580-$590 million, higher than the current Zacks Consensus Estimate of $571.48 million. Adjusted net income is expected between $3.35 and $3.45 per share, higher than the Zacks Consensus estimate of $3.32.

WEX raised its guidance for full-year 2022. Revenues are now expected between $2.250 billion and $2.280 billion compared with the prior guidance of $2.155-$2.195 billion, higher than the current Zacks Consensus Estimate of $2.21 billion. Adjusted net income is now expected between $13.05 and $13.30 per share compared with the previous guidance of $12.4-$12.8 per share, higher than the Zacks Consensus estimate of $12.76.

Currently, WEX carries a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

WEX Inc. Price, Consensus and EPS Surprise

WEX Inc. price-consensus-eps-surprise-chart | WEX Inc. Quote

Recent Performance of Some Other Business Services Companies

Equifax EFX reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings IQV reported solid second-quarter 2022 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group OMC reported impressive second-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.


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