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Is Disappointment in Store for Fiserv (FISV) in Q1 Earnings?

Zacks Equity Research

Fiserv, Inc. FISV is scheduled to report first-quarter 2019 results on Apr 30, after market close.

While strength in Payments and Industry Products segment should boost the company’s top line, the bottom line is likely to benefit from internal revenue growth, tax leverage and operational effectiveness.

So far this year, shares of Fiserv have gained 17.7% compared with the 25.6% rise of the industry it belongs to and 16.5% increase of the Zacks S&P 500 composite.

 

Let's check out how things are shaping up for the announcement.

Top-Line Expectations

The Zacks Consensus Estimate for first-quarter 2019 revenues stands at $1.50 billion, indicating growth of 4% from the year-ago reported figure.

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The expected growth is likely to be driven by strength in Payments and Industry Products segment. The consensus estimate for this segment’s revenues is pegged at $913 million, indicating growth of 8.4% from the year-ago reported figure. The segment should benefit from solid performance of card services, biller solutions and electronic payments. The company is likely to witness solid growth across organic debit transaction and total P2P transactions, including both Popmoney and Zelle solutions, increase in Mobiliti ASP subscribers and client additions in its unified digital platform Architect. In fourth-quarter 2018, segment revenues of $944 million increased 9.1% year over year.

For Financial Institution Services revenues,the consensus mark is pegged at $604 million, indicating decline of 1.9% from the year-ago reported figure. Divestiture of 55% interest of the company's Lending Solutions business (the "Lending Transaction") is expected to weigh on the segment. In fourth-quarter 2018, segment revenues of $615 million decreased 7.9% year over year.

In fourth-quarter 2018, total revenues of $1.55 billion increased 2.3% year over year. Internal revenue growth was 4.5%.

Bottom Line to Improve Year Over Year

The Zacks Consensus Estimate for earnings per share in the to-be-reported quarter is pegged at 82 cents, implying growth of 7.9% from the year-ago period. The bottom line is likely to benefit from internal revenue growth, tax leverage and operational effectiveness.

In fourth-quarter 2018, adjusted earnings per share of 84 cents increased 23.5% year over year.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Fiserv has a Zacks Rank #3 and an Earnings ESP of -1.66%, a combination that makes surprise prediction difficult.

Fiserv, Inc. Price and EPS Surprise

 

Fiserv, Inc. Price and EPS Surprise | Fiserv, Inc. Quote

Stocks That Warrant a Look

Here are a few stocks from the broader Zacks Business Services sector that investors may consider as our model shows that these have the right combination of elements to beat on earnings in first-quarter 2019:

SailPoint Technologies SAIL has an Earnings ESP of +100.00% and a Zacks Rank #1. The company is scheduled to report results on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

EVERTEC EVTC has an Earnings ESP of +3.73% and a Zacks Rank #3. The company is slated to release results on May 1.

Delphi Technologies DLPH has an Earnings ESP of +1.56% and a Zacks Rank #3. The company is scheduled to report results on May 2.

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Delphi Technologies PLC (DLPH) : Free Stock Analysis Report
 
Fiserv, Inc. (FISV) : Free Stock Analysis Report
 
Evertec, Inc. (EVTC) : Free Stock Analysis Report
 
SailPoint Technologies Holdings, Inc. (SAIL) : Free Stock Analysis Report
 
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Zacks Investment Research