Expansion continues to propel WEX sales, but profits are up as well
Photo / Courtesy of WEX
WEX has its global headquarters on Portland’s eastern waterfront.
WEX Inc. (NYSE: WEX), a Portland-based global provider of payments solutions, posted an increase in fourth-quarter earnings and revenues amid a bullish outlook on increasing market share in 2020.
Earnings per diluted share in the fourth quarter were $2.61, or 24% higher than a year ago. Analysts polled by Zacks Investment Research had projected earnings per share of $2.56.
Fourth-quarter revenues were up 15% at $440 million, falling short of the $456.08 million Zacks consensus forecast. Full-year 2019 revenue was also up 15%, at $1.72 billion.
“2019 was another record year for WEX, capped off by an impressive fourth quarter driven by double-digit top-line growth and strong operating leverage,” said WEX Chair and CEO Melissa Smith. “The fourth quarter built upon the momentum from earlier in the year, marked by robust transaction volume growth, strong performance from acquisitions, significant contribution from our previous contract signings and meaningful new contract wins.”
Shares of WEX have lately traded at the high end of their 52-week range of $169.48 to 234.95.
The news comes about three weeks after the fast-growing company unveiled two acquisitions worth a combined $1.7 billion. Separately, it announced plans to build a $50 million operations center in Scarborough to accommodate its growing workforce.
Nicola Morris, WEX’s chief corporate development officer, told Mainebiz in an “On the Record” interview last October that more international acquisitions were likely, saying: “We’re certainly evaluating all the time, and we don’t preclude something because it’s outside the United States.”
Organic growth, strong returns
In terms of how WEX’s business units performed in the fourth quarter, health and employee benefit solutions saw a 17% jump in the average number of software-as-a-service accounts over the same period last year, while total fuel transactions processed climbed 12% and travel and corporate solutions’ purchase volumes were 17% higher.
“Good organic growth coupled with solid returns from our strategic acquisitions are proof of the extraordinary progress we’ve made in 2019,” said CFO Roberto Simon. “Looking forward into 2020, we plan to capitalize on additional opportunities, focusing on our core fleet business and the high-growth travel, corporate payments, and U.S. health markets in the coming year.”
Smith was equally upbeat, saying: “We are well-positioned to gain additional market share in 2020 as we continue to execute against our strategic pillars and create shareholder value.”
For the full year 2020, WEX projects revenue in the range of $1,86 billion to $1.9 million and adjusted net income in the range of $447 million to $464 million, or $10.15 to $10.55 per diluted share.
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