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WEX Inc. WEX reported dismal third-quarter 2024 results, wherein earnings and revenues missed the Zacks Consensus Estimates.
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The stock declined 4.7% since the release of results on Oct. 24 due to earnings and revenues miss, and a weak guidance.
For the fourth quarter of 2024, the company lowered its revenue guidance to $630-$640 million from the $688-$698 million provided in the preceding quarter. The mid-point ($635 million) of WEX’s revised guidance range is higher than the Zacks Consensus Estimate of $633.8 million.
The company reduced its adjusted diluted earnings per share view to $3.51-$3.61 from the $4.42-$4.52 given in the preceding quarter. The revised guidance range is lower than the consensus estimate for earnings of $3.66 per share.
For 2024, the company lowered its revenue guidance to $2.62-$2.63 billion from $2.68-$2.72 billion given in the previous quarter. The guided range is lower than the Zacks Consensus Estimate for revenues of $2.64 billion.
WEX lowered adjusted diluted earnings per share to $15.21-$15.31 from the $15.98-$16.38 provided in the preceding quarter. The company’s revised guidance is lower than the consensus estimate for earnings of $15.38 per share.
Quarterly adjusted earnings (excluding $1.8 from non-recurring items) of $4.4 share missed the Zacks Consensus Estimate by 1.6% but increased 7.4% from the year-ago quarter. Revenues of $665.5 million missed the consensus estimate by 3.3% but rose 2.2% on a year-over-year basis.
The WEX stock has declined 18.1% over the past six months against the 14.4% rise of the industry it belongs to and the 15.4% rally of the Zacks S&P 500 Composite.
Six Months Price Performance
Image Source: Zacks Investment Research
Segmental Revenues of WEX
The Mobility segment’s revenues increased 2% from the year-ago quarter to $357.2 million and surpassed our estimate of $352.2 million. Incremental investments in sales and marketing, mainly in digital marketing, drove signings, which resulted in this segment’s revenue growth. The Corporate Payments segment’s revenues were $126.9 million, down 6.1% from the third quarter of 2023. The same missed our estimate of $155.2 million.
The Benefits segment’s revenues increased 9.3% year over year to $181.5 million. The figure missed our projection of $185.5 million. Strong core market dynamics that grew the SaaS accounts have fueled this segment’s revenue growth.
WEX’s Operating Results
Adjusted operating income rose 12.3% to $196.4 million from the year-ago quarter. The figure missed our estimate of $271.8 million. The adjusted operating income margin of 47.6% grew 130 basis points year over year, beating our projected 39.2%.