October 30, 2013

WEX exceeds forecast for quarterly earnings

Income rises 20 percent, but the Maine credit-card processor also lowers its full-year outlook, citing lower fuel prices.

By Jessica Hall jhall@pressherald.com
Staff Writer

WEX Inc., a credit-card processing company, posted better-than-expected third-quarter earnings, but the company lowered its full-year revenue outlook because of lower fuel prices and a slower rollout of new customers.

The South Portland-based company said the third-quarter’s adjusted net income increased 20 percent to $50.4 million, or $1.29 per share, up from $42.0 million, or $1.08 a share, for the same period a year ago. On a net basis, it earned $43.8 million, or $1.12 per share, compared with $14.3 million, or 37 cents a share, for the third quarter last year.

Third-quarter revenues increased 19 percent to $191.5 million from $161.0 million a year ago.

WEX said it has benefited from growth in its core business of processing payments for fleets, as well as its international expansion in areas such as Europe, Asia Pacific and South America, and its growing business of providing virtual credit cards. Virtual cards provide customers with 16-digit card numbers delivered to their computer screens. The accounts are prepaid with credit cards or debit cards.

WEX also has grown through a series of acquisitions, including last year’s $369 million deal to buy fuel-card company Fleet One from private-equity firms. Other recent deals include buying 51 percent of UNIK SA, a Brazilian provider of payroll cards, for about $21.9 million, as well as acquiring CorporatePay, a London-based provider of corporate prepaid cards for the travel industry, for about $27.5 million in cash.

WEX Chairman and Chief Executive Michael Dubyak said the company views the U.S. economic recovery as “still mixed to slightly down.”

The 16-day federal government shutdown did not dampen WEX’s business because government contracts represent less than 1 percent of its business, Dubyak said.

For the fourth quarter, WEX expects revenue in the range of $173 million to $178 million and adjusted net income in the range of $41 million to $44 million, or $1.04 to $1.12 per share.

For all of 2013, the company expects revenue in the range of $708 million to $713 million, down from its previous forecast of revenues in the range of $718 million to $728 million. On an earnings basis, WEX expects results to be in the range of $171 million to $174 million, or $4.37 to $4.44 per share.

Shares of WEX gained $3.76, or 4.31 percent, to close at $91.09.

Jessica Hall can be contacted at 791-6316 or at:jhall@pressherald.com
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