Mastercard (MA) earnings topped forecasts early Tuesday, with another leading payments stock, Global Payments (GPN), reporting strong earnings and giving bullish full-year guidance. Meanwhile fuel cards specialist FleetCor Technologies (FLT) topped views after Tuesday's market close.
XMastercard Earnings
Earnings: Wall Street had seen Mastercard earnings per share ballooning 25% to $1.68, according to Zacks Investment Research. Revenue was expected to vault 14% to $3.864 billion. Gross dollar volume climbed 13%, on a local currency basis, to $1.5 trillion.
Results: EPS of $1.78 on revenue of $3.9 billion. Cross-border volumes rose 17% on a local currency basis.
Stock: Shares initially rose but hit resistance at the 200-day line and closed down 1.8% to 187.68 on the stock market today. Mastercard stock had been holding up reasonably well in the market correction, but plunged through its 200-day line Monday for the first time in two years.
"Our business wins and new partnerships, strengthened by our differentiated services offerings, are helping drive our global momentum," CEO Ajay Banga said in a statement.
Goldman Sachs has touted Mastercard as being the "best positioned" to snatch share in the B2B market through offerings such as Visa Direct alternative Mastercard Send. The investment bank added the stock to its Conviction List last month, raising its earnings estimates and giving it a 12-month price target hike to 260 from 230. Analyst James Schneider said core consumer volume and exposure to Europe and other growth markets should fuel share price gains.
Global Payments Earnings
Earnings: Analysts had forecast Global Payments earnings swelling 22% to $1.40 a share, while revenue had been expected to advance 10% to $1.025 billion.
Results: Global Payments earnings rose 25% to $1.45 a share. Adjusted revenue climbed to $1.025 billion.
Outlook: Global Payments sees full-year earnings of $5.12-$5.22, with revenue of $3.96 billion to $3.98 billion. Analysts had expected EPS of $4.86 on sales of $3.91 billion.
Stock: Shares rose 1.7% to 110.66 Tuesday. Global Payments stock technically had been building a flat base, but fell to an 8-month low intraday Monday. Shares have fallen more than 15% from the consolidation high, which means it's no longer a flat base.
Deutsche Bank managing director Bryan Keane rated Global Payments stock as a buy heading into earnings. The price target was 140.
"We expect continued low double-digit organic constant currency growth excluding (North American) wholesale driven by the company's tech-enabled businesses and shift into more software ownership," he said in a research note. "In addition, eComm/omni-channel continue to drive accelerated rates of growth and GPN is pushing into faster growing International markets where secular trends are strong."
The analyst said there is an opportunity for slightly improving organic growth over time, as well as margin expansion from mix shift.
FleetCor Earnings
Earnings: FleetCor earnings are expected to jump 18% to $2.67 as revenue ticks up 6% to $615 million.
Results: FleetCor earnings rose to $2.68 with revenue up 7% to 619.59 million.
FleetCor also said late Tuesday that people in Brazil can use its highway toll payment passes to make purchases at McDonald's (MCD) locations in that country.
Stock: FleetCor stock was not yet active late Tuesday. Shares closed up 1.1% to 185.25. FleetCor stock has been plunging since reaching a high of 230.24 on Oct. 1, hitting a 2018 low on Monday.
Ahead of earnings, Deutsche Bank analyst Ashish Sabadra was bullish on FleetCor stock, rating it as a buy with a 240 target heading into earnings.
"Onboarding of Shell and Chevron in 2019 ($80-$100m of annualized revenues) should drive further acceleration in organic revenue growth to low-teens in 2019, he said in a research note. "We expect solid margin expansion in (the second half of 2018) and believe the company can drive margin expansion in 2019 despite the headwinds from onboarding private label fleet cards."
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