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October 29, 2009

Wright Express earnings drop on weakened sales

By The Mainebiz News Staff

Third-quarter earnings plunged at Wright Express Corp. as its customers continued to curtail spending in a tough economy.

The South Portland company, a payment processor for commercial and government vehicle fleets, reported net income of $23.4 million, down from $72.3 million at the same time last year. Revenue sank 20% to $86.6 million from $105.8 million in the third quarter of 2008.

Because it uses fuel price derivate instruments to mitigate the risks related to the volatility of fuel prices, the company also reports adjusted net income, a non-GAAP number. Its adjusted net income for the third quarter was $24.9 million compared with $21.8 million for the year-earlier period. That figure excludes an unrealized, non-cash $100,000 loss on its fuel price derivatives, compared to a gain of $82.4 million in the third-quarter of 2008.

Still, adjusted net income and revenues exceeded Wall Street's expectations. MasterCard volumes, fuel prices and income from late fees were higher than expected, and new business helped to offset losses among existing customers suffering from the down economy, Chairman and CEO Michael Dubyak said in the report.

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