WEX adjusted net income dips in Q2
Although lower fuel prices and volatility in foreign currency markets continue to cut into its adjusted net income, WEX Inc. (NYSE:WEX) slightly beat analysts’ expectations in reporting a 6% increase in total revenue for the second quarter of 2015 to $213.7 million, compared to $201.6 million for the same period a year ago.
On a non-GAAP basis, the South Portland-based company reported earnings at $1.25 per share, just above the second quarter $1.24 per share average expectation of 15 MarketWatch analysts who follow the company’s performance. Adjusted net income for the three months ended June 30 decreased 9% to $48.3 million from the $53.1 million reported a year ago.
“We actually grew organically 10% in the quarter,” WEX President and CEO Melissa Smith told Mainebiz in a telephone interview prior to a morning conference call with investors. “Overall, I remain optimistic about the trajectory of our long-term growth. Our guidance assumes that 2015 will continue to be a year of investment as we ramp our global operations and optimize the efficiency of our expanded infrastructure and assets.”
In second quarter performance metrics, which include financials stemming from WEX’s December 2014 acquisition of ExxonMobil's ESSO Card program in Europe through a majority owned joint venture, WEX Europe Services Ltd., the company reported:
• Average number of vehicles serviced worldwide was approximately 9.8 million, an increase of 24% from the second quarter of 2014.
• Total fuel transactions processed increase 5% from the second quarter of 2014 to 103.1 million. Payment processing transactions increased 11% to 86.7 million.
• Average expenditure per payment processing transaction decreased 22% from the second quarter of 2014 to $68.98.
• U.S. retail fuel price decreased 27% to $2.74 per gallon from $3.76 per gallon in the second quarter of 2014.
• Total corporate card purchase volume grew 31% to $5.7 billion, from $4.3 billion for the second quarter of 2014.
The company also announced today that it has been selected by ServiceMaster Global Holdings Inc. to provide an array of fleet card and corporate payment services for the Tennessee-based company’s fleet of 6,600 vehicles. “We’re winning business on a regular basis that we don’t necessarily talk about,” Smith said. “We only talk about the large accounts we’ve picked up, and this clearly fits that description.”
“We have established the building blocks we need to retain our market leadership in our core segments while expanding our reach in high-growth, emerging industries,” Smith added. “We will continue to seek strategic acquisitions that complement our business or enhance our offering in the market."
For the third quarter of 2015, WEX expects revenue in the range of $224 million to $233 million and adjusted net income in the range of $54 million to $57 million, or $1.38 to $1.46 per diluted share.
For the full year in 2015, the company expects revenue in the range of $847 million to $872 million and adjusted net income in the range of $192 million to $201 million, or $4.94 to $5.14 per diluted share.
At 11:30 a.m. Wednesday, WEX shares traded at $106.39, up from $105.85 at the opening of today’s trading.
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