Yahoo Finance Euronet (EEFT) Q4 Earnings Beat Mark on Segmental Strength
Euronet Worldwide, Inc. EEFT reported fourth-quarter 2022 adjusted earnings of $1.39 per share, which outpaced the Zacks Consensus Estimate by 14.9% and our estimate of $1.20. The bottom line improved 21% year over year.
Total revenues amounted to $865.7 million, which rose 7% year over year or 16% on a constant-currency basis in the quarter under review. The top line beat the consensus mark by a whisker and our estimate of $855 million.
The quarterly results received an impetus from recovering international travel, expanding physical and digital distribution networks coupled with a robust pipeline for Euronet’s Dandelion solution. However, the upside was partly offset by elevated operating tax expense as well as inflationary pressure leading to a rise in salary expense.
Euronet Worldwide, Inc. Price, Consensus and EPS Surprise
Euronet Worldwide, Inc. price-consensus-eps-surprise-chart | Euronet Worldwide, Inc. Quote
Q4 Update
EEFT reported a net income of $1.31 per share in the fourth quarter against the prior-year quarter’s loss of 6 cents. Operating income of $79.1 million increased nearly three-fold year over year and came higher than our estimate of $63.1 million.
Total operating expenses inched up 0.5% year over year to $786.6 million but lagged our estimate of $791.9 million. The increase was due to a rise in direct operating costs, salaries and benefits, and selling, general and administrative expenses.
Adjusted EBITDA came in at $127 million, up 12% year over year in the quarter under review and also higher than our estimate of $125.5 million.
Segmental Performances
The EFT Processing segment recorded revenues of $210.1 million, which climbed 29% year over year (up 43% on a constant currency basis). However, the figure fell shy of the Zacks Consensus Estimate of $219 million and our estimate of $225.7 million.
Adjusted EBITDA of $43.4 million soared 68% year over year or 85% on a constant-currency basis in the fourth quarter but lagged our estimate of $51.4 million.
The segment’s operating income increased nearly 11-fold year over year to $19.1 million, Total transactions of 1,825 million rose 43% year over year in the quarter under review quarter but missed the consensus mark of 1,896 million.
The segmental performance benefited on the back of improved domestic and international withdrawal transactions resulting from the continued rebound in travel and growing point-of-sale processing revenues. Substantial volume increase in low-priced payment processing transactions within the Asia Pacific also accounted for the impressive segmental performance.
The epay segment’s revenues dipped 0.5% year over year but rose 9% on a constant-currency basis to $285.5 million in the fourth quarter. The figure beat the Zacks Consensus Estimate of $284 million and our estimate of $262.7 million.
Adjusted EBITDA of $42.6 million remained flat year over year but advanced 11% year over year. The metric came higher than our estimate of $32.9 million.
Operating income increased 1% year over year or 12% on a constant-currency basis to $41.1 million in the quarter under review.
Transactions totaled 941 million, which rose 10% year over year but were lower than the consensus mark of 1,074 million.
Growth in digital branded payments, an expanding digital distribution channel and mobile growth contributed to the sound segmental performance.
The Money Transfer segment reported revenues of $372.1 million, which advanced 2% year over year (up 9% on a constant-currency basis) in the fourth quarter. The figure outpaced the Zacks Consensus Estimate of $364 million and our estimate of $368.4 million.
Adjusted EBITDA decreased 4% year over year but improved 5% on a constant-currency basis to $48.1 million, lower than our estimate of $48.3 million.
Operating income of $39.9 million increased nearly 15-fold year over year in the quarter under review. Total transactions rose 10% year over year to 39.4 million, higher than the consensus mark of 38.9 million.
The solid segmental results were aided by 13% growth in each of its U.S.-outbound transactions and international-originated money transfers.
Corporate and Other’s expenses of $21 million escalated 30.4% year over year due to elevated short and long-term compensation expenses.
Financial Update (as of Dec 31, 2022)
Euronet exited the fourth quarter with cash and cash equivalents of $1,131.2 million, which fell 10.3% from the figure in 2021 end. Total assets of $5,403.6 million increased 13.9% from the 2021-end level.
Debt obligations, net of the current portion, came in at $1,609.1 million. The figure advanced 13.3% from the level as of Dec 31, 2021.
Equity of $1,244.4 million dipped 0.9% from the 2021-end level.
There was roughly $740 million left under EEFT’s revolving credit facilities at the fourth-quarter end.
Full-Year Update
In 2022, Euronet’s adjusted earnings of $6.51 per share surged 76% year over year. Total revenues climbed 12% year over year or 22% on a constant-currency basis to $3,358.8 million.
Operating income of $385.4 million more than doubled year over year in 2022.
Adjusted EBITDA climbed 43% year over year to $565.3 million. Revenues from the EFT Processing and Money Transfer segments witnessed year-over-year increases of 56% and 3%, respectively, in 2022. However, the same for the epay segment dipped 1% year over year in the same time frame.
1Q23 Outlook
Management anticipates adjusted earnings to be around 85 cents per share in the first quarter of 2023, which indicates an improvement of 23% from the reported figure in the first quarter of 2022.
Zacks Rank
Euronet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
Of the other Finance sector players that have reported fourth-quarter results so far, the bottom lines of Synchrony Financial SYF, State Street Corporation STT and Discover Financial Services DFS beat the Zacks Consensus Estimate.
Synchrony Financial reported fourth-quarter 2022 adjusted earnings per share of $1.26, which outpaced the Zacks Consensus Estimate by 12.5%. However, the bottom line dropped nearly 15% year over year. The net interest income of SYF amounted to $4,106 million, which improved 7.2% year over year. The top line beat the consensus mark by 1.7%. Other income of Synchrony Financial plunged 82% year over year to $30 million in the fourth quarter. Total loan receivables of SYF were $92.5 billion, which rose 14.5% year over year.
State Street’s fourth-quarter 2022 adjusted earnings of $2.07 per share outpaced the Zacks Consensus Estimate of $2.00. The bottom line was 3.5% higher than the prior-year level. Quarterly total revenues were $3.16 billion, increasing 3.3% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $3.06 billion. Net interest revenues of STT were $791 million, jumping 63.4% year over year. The net interest margin (NIM) rose 56 basis points year over year to 1.29%.
Discover Financial reported fourth-quarter 2022 adjusted earnings of $3.77 per share, which outpaced the Zacks Consensus Estimate of $3.58 by 5.3%. The bottom line improved 4% year over year. Revenues — net of interest expenses — of DFS amounted to $3,732 million, which rose 27% year over year. The top line outpaced the consensus mark of $3,649 million. DFS reported a net income of $1,033 million, down 3% year over year. Operating efficiency (total operating expense divided by revenues, net of interest expense) came in at 40%, which deteriorated 470 basis points (bps) year over year in the fourth quarter.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Discover Financial Services (DFS) : Free Stock Analysis Report
State Street Corporation (STT) : Free Stock Analysis Report
Euronet Worldwide, Inc. (EEFT) : Free Stock Analysis Report
Synchrony Financial (SYF) : Free Stock Analysis Report
