Key Highlights

  • Consensus EPS of 5.66 compares with second-quarter diluted EPS of 3.11, against 1.98 a year earlier.
  • Consensus revenue of USD 749.74 million compares with second-quarter revenues of USD 753.5 million, against USD 659.6 million.
  • Higher domestic fuel prices increased revenues by USD 63.8 million, and the average U.S. fuel price was 4.70 per gallon.
  • Operating income was USD 203.2 million against USD 156.8 million, and net income attributable to shareholders was USD 108.5 million.

WEX (NYSE:WEX) reports third-quarter results on Wednesday, Oct. 28, after the market closes. Consensus stands at EPS of 5.66 on revenue of USD 749.74 million, and the company has a market capitalization of USD 6.55 billion.

WEX is a global commerce platform with Mobility, Benefits and Corporate Payments segments. Second-quarter revenues were USD 753.5 million against USD 659.6 million, and net income attributable to shareholders was USD 108.5 million against USD 68.1 million.

Estimates Against the Last Reported Quarter

The EPS estimate of 5.66 is above the second-quarter diluted EPS of 3.11, which compared with 1.98 a year earlier. The estimates table does not state its EPS basis. The revenue estimate of USD 749.74 million is below the USD 753.5 million reported, which compared with USD 659.6 million.

The average U.S. fuel price was 4.70 per gallon against 3.28, up 43%. Basic EPS was 3.13 against 1.98.

What the Filing Gives and What the Sources Leave Open

The sources supplied include no earnings call transcript or published guidance, so there are no management ranges to set against the estimates. The filing carries no third-quarter figures.

The filing states that the high volatility and rapid increase in the price of fuel from the war in the Middle East produced unfavorable European fuel price spreads. It also states that higher domestic fuel prices are accretive to Mobility segment margin because most costs are not impacted by fuel prices.

Fuel Price, Fee and Credit Loss Detail

Late fee revenue was USD 82.6 million against USD 65.9 million, and factoring fee revenue was USD 18.9 million against USD 14.1 million, for finance fee revenue of USD 101.6 million against USD 80.0 million. The net payment processing rate was 1.23% against 1.31%.

The net late fee rate was 0.48% against 0.54%, and credit losses were 16.1 basis points against 13.5. The provision for credit losses was USD 33.0 million against USD 21.5 million.

Cost Lines, Cash and Debt

Processing costs were USD 161.0 million against USD 161.4 million, and general and administrative expenses were USD 104.3 million against USD 86.3 million. Sales and marketing was USD 112.7 million against USD 97.7 million, and financing interest expense was USD 52.2 million against USD 65.0 million.

Income before income taxes was USD 150.5 million against USD 93.4 million, and income tax expense was USD 41.9 million. Cash and cash equivalents were USD 1,161.5 million against USD 905.8 million at year end, and long-term debt, net was USD 3,523.0 million. Revenues were USD 753.5 million against USD 659.6 million, and operating income was USD 203.2 million against USD 156.8 million. Cost of services was USD 289.7 million against USD 272.7 million. The estimates table lists a market capitalization of USD 6.55 billion.

Markers for the Release

Reported EPS against 5.66 and revenues against USD 749.74 million are the headline comparisons. Other markers are fuel prices, late fee revenue and credit losses.