Following Acquisition by FIS, Worldpay Beats Analyst Estimates

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by Teuta Franjkovic · 3 min read
Following Acquisition by FIS, Worldpay Beats Analyst Estimates
Photo: Worldpay Global / Twitter

Worldpay’s second-quarter earnings per share were of $1.24 that beat the average analyst estimate of $1.18. Though FIS and Worldpay are looking for diversification, just getting under the one roof won’t automatically maximize their value.

In their first earnings report after they have been acquired, payment processor company Worldpay beat Wall Street’s expectations. Their second-quarter earnings per share was of $1.24 that beat the average analyst estimate of $1.18.

The revenue rose up by 7 percent in the quarter to $1.07 billion compared to $1 billion in the same quarter last year. Its earnings before interest, taxes, depreciation and amortization were up to $561 million from $493 million in the same quarter of 2018.

Just for reminder, greater Cincinnati-based Worldpay Inc. and Fidelity National Information Services Inc. have completed their $43 billion acquisition deal last month.

Worldpay was created by Fifth Third Bancorp by the name Midwest Payment Systems in 1971. It changed its name in 2003 to Fifth Third Processing Solutions that then went on to become separate company back in 2009. That company went public as Vantiv Inc. in 2012, and acquired London-based Worldpay in January 2018 for $11.9 billion while changing its name to Worldpay, keeping its headquarters in the Cincinnati region.

In the other news, Fidelity National Information Services (FIS) announced their second-quarter earnings. The revenue went a little up from $2,106 million to $2,112 million. Net earnings were around $154 million for the quarter, or $0.47 per diluted share, which represents a decrease of 27 percent compared to $0.64 per diluted share in the prior-year quarter.

Organic revenue grew up by 5 percent, excluding the impact of divestitures and foreign currency fluctuations. Adjusted EBITDA margin widened 170 basis points to 37.6 percent.

Adjusted net earnings were $582 million, or $1.78 per diluted share, compared to $1.63 per diluted share in the prior-year quarter, an increase of 9 percent.

Charles Drucker, vice chairman of FIS said he is excited about the strengths and new opportunities available through the combination of Worldpay and FIS. He said Worldpay continues to deliver strong new sales due to their colleagues’ focus on execution and dedication to client service. He noted:

“Now with FIS, the two companies are uniquely positioned to capitalize on the most significant areas of secular growth.”

Together with Worldpay, FIS will possess three new business divisions that will try to hold the combined strengths of the companies.

Firstly, it will be the Merchant Solutions division. The businesses that embrace this sector posted $1.1 billion in revenue in Q2 2019, up 8% YoY, and made it the winner by its growth between all three segments. FIS Chairman, President, and CEO Gary Norcross announced that Merchant Solutions will be led by Worldpay’s former President and COO Mark Heimbouch. Worldpay annually processes around 30 billion transactions and FIS using Worldpay brand could find significant success, especially if combined with FIS’ own offerings.

The second one is the Banking Solutions segment that will offer cloud-based banking solutions as well as tools for issuer processing. This was the biggest revenue driver in the second quarter with $1.5 billion earned. Analysts presume that the increase in non-cash payments worldwide could boost this segment as well widened Worldpay’s strong e-commerce offerings and wide processing reach.

The third segment, Capital Market Solutions has the smallest revenue of all three posting $594 million in revenue, rising 2% YoY.

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Teuta Franjkovic

Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.

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