Tags: Fidelity | international | growth | FIS

Fidelity National Sees International Growth

By    |   Friday, 11 Nov 2011 10:25 AM

Fidelity National Information Services (FIS) is the largest provider of behind-the-scenes credit card processing and payment services. The company is on track to provide steady low double-digit growth on the back of a rapid rate of international expansion.

Fidelity National provides its financial institution customers credit card and other payment processing, issues credit and prepaid debit cards, and offers electronic funds transfer services. The company divides revenues into three segments: financial solutions, payment solutions and international solutions. The largest portion of the services provided is software programs used by clients to manage and integrate processing functions.

For the 2011 third quarter, Fidelity National reported revenue of $1.43 billion, up 10 percent from $1.29 billion. The organic growth rate was 4.1 percent with the balance from acquisitions.

Adjusted net income was 62 cents per share, up 19 percent from 52 cents a year earlier. The quarter was the fifth in a row that earnings met or exceeded the Wall Street consensus estimate. For the 2011 full year, the earnings forecast is $2.30, compared to $2.02 earned in 2010. The earnings forecast for 2012 is $2.60 per share.

International sales

In third quarter results, revenues increased by 7.8 percent for financial solutions, 0.5 percent for payment solutions and 49 percent for international solutions. At this point, financial and payment solutions are generating the bulk — 85 percent — of earnings, but the rapid growth in international sales will allow Fidelity National to generate 10 percent plus revenue and profit gains over the next few years.

The international solutions sector also currently has lower EBITDA margins, which should expand as the business grows.

The most recent analyst report on FIS was an initiation of coverage by the Deutsche Bank analysts with a hold rating and a target price 20 percent above the current share price.

The company next reports on Feb. 8.

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Fidelity National Information Services (FIS) is the largest provider of behind-the-scenes credit card processing and payment services. The company is on track to provide steady low double-digit growth on the back of a rapid rate of international expansion. Fidelity...
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2011-25-11
Friday, 11 Nov 2011 10:25 AM
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