WEX beats analysts' projections, but stock drops
WEX Inc. reported today financial results for the three months ended Dec. 31, 2015, with total revenue for the fourth quarter increasing slightly year-over-year at $212.6 million compared with $211.9 million for the same period in 2014.
The South Portland-based company’s fourth quarter earnings of $1.15 per share exceed the Wall Street analysts’ consensus estimate by 10 cents, according to MarketWatch.
Still, in what has already been a rocky day on Wall Street, with the Dow down 2.17% in late-morning trading, shares of WEX (NYSE: WEX) were down 11.22%, or $7.58 a share.
In a telephone interview with Mainebiz prior to a morning conference call with investors, WEX President and CEO Melissa Smith said ongoing decreases in fuel prices and fluctuations in currency markets continue to dilute the company’s net income. But those “macroeconomic headwinds” have been offset by the company’s strong performance in its travel/corporate payment ($195.42 million, or 7% year-to-year growth over 2014’s $182.92 million) and health and employee benefit ($120.26 million, or 66% growth over 2014’s $72.56 million) divisions.
“For us, the key point is that we’re still seeing continuing strong organic growth across our core verticals … if anything, we’re seeing accelerating growth,” she said.
Smith characterized the continuing fall in fuel prices as a “perfect storm” that contributed to the fleet division’s 4% decline in yearly revenues, reported at $538.96 million, compared to $562.17 million in 2014. But she was quick to add, “We’re Mainers. We’re pretty good at weathering storms here.”
Smith said the company’s acquisition of fleet card provider Electronic Funds Source LLC for about $1.1 billion in cash plus stock, which was announced in October, is continuing to progress through the regulatory approval process and is expected to close sometime this year. That purchase is expected to complement WEX’s core fleet business by adding EFS’s portfolio in the mid- and large-sized over-the-road fleet segments.
“We exit 2015 with solid fundamentals, a strong underlying growth engine and a portfolio of high-performing products that are both diverse and global,” Smith said in the company’s release announcing its earnings. “Though we anticipate that the headwinds of 2015 will continue, we are confident in our ability to achieve organic growth in the coming year. We believe the combination of this growth, coupled with our strategic investments, including recently announced acquisitions, position us well in the marketplace.”
In the forward-looking portion of its earnings statement, WEX anticipates revenue in the range of $190 million to $200 million in the first quarter of 2016. For the full year, the company expects revenue in the range of $860 million to $890 million.
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