Fleet card provider FleetCor Technologies Inc.’s third-quarter results benefitted from its mergers-and-acquisitions strategy and its new universal card product, one analyst says.
The company on Nov. 9 reported third quarter net revenues of $134.2 million, up 20.1% from $111.7 million during the same period ended Sept. 30 last year. Net income was up 21.3%, to $40.5 million from $33.4 million.
“It was a good quarter,” Citigroup Global Markets analyst Philip Stiller tells PaymentsSource. “FleetCor is benefitting from the rollout of its universal fleet card product to a greater degree than most people expected.”
The company’s deal to partner with MasterCard has given its products broader acceptance at more locations, he adds.
FleetCor’s competitor Wright Express Corp. continues to see huge gains in its earnings, particularly from its own MasterCard credit card product (
Stiller also lauds FleetCor’s acquisition strategy.
“The U.S. market is not experiencing strong economic growth, and FleetCor’s relatively large business in the United Kingdom has been a little soft for them, but they are doing other things,” such as making an acquisition in Mexico, Stiller says. “It’s a good secular opportunity for them in a market that is relatively unpenetrated,” he says.
Ron Clarke, FleetCor chairman, president and chief executive officer, said in the company’s earnings release Fleetcor made progress on its acquisition strategy during the quarter, including buying a prepaid fuel card company in Mexico.
In a Sept. 19 press release announcing that deal, which did not disclose the acquired company, Fleetcor said the Mexican company serves more than 10,000 businesses with more than 800,000 cardholders and beneficiaries.
“The acquisition is consistent with our strategy to build a position in ‘emerging payment markets’ and establishes a beachhead in Latin America from which we expect to expand,” Clarke said in the earnings release.
Regionally, North American customers used the company’s cards to initiate 39.9 million transactions. At $2.33 per transaction, net revenues in the region totaled $93 million. That compares with $74.8 million earned from 39 million transactions that earned an average of $1.92 each a year earlier, Norcross Ga.-based FleetCor noted in its earnings release.
The company’s international segment earned $41.2 million on 14.3 million transactions that generated $2.89 each, which compared with $36.6 million earned from 10.6 million transactions earning $3.45 each in last year’s third quarter, FleetCor said.
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