Fresh off of its Dec. 15 initial public offering, fleet card provider FleetCor Technologies Inc. on Feb. 23 reported net income of $17.5 million for the fourth quarter ended Dec. 31, down 30% from $25 million during the same period a year earlier. Total revenue rose 3.2%, to $106.5 million from $103.2 million.
During the quarter, Norcross, Ga.-based Fleetcor signed brand-wide fuel card deals with petroleum company Chevron Corp. and truckstop chains Flying J Inc. and TravelCenters of America. “These three additions will add more than 15,000 additional accepting sites for our product, which we expect will enhance the [profit] of our product,” Ron Clarke, FleetCor chairman, president and CEO, told analysts during a Feb. 23 conference call to discuss earnings.
Moreover, for Chevron, Citgo Petroleum Corp. and BP PLC, FleetCor developed a secondary, universal MasterCard usable not only at a partner brands’ sites but in virtually any other U.S. gas station, Clarke noted. Regions Financial Corp. issues the card (
“As we convert their larger accounts over to these universal card programs, we expect transactions to grow because of these additional sites these cardholders will be able to go to,” Clarke said.
About two-thirds of the company’s revenue comes from North America, but Clarke expects the international piece to “grow significantly.”
On Feb.17, FleetCor signed a 10-year fuel card deal with Royal Dutch Shell’s European unit, beating out various other bidders vying for the portfolio, which “is the world’s largest and most complex,” Clarke said, calling the deal a “single-digit millions annually” contract.
In that deal, Shell’s fuel card system will migrate to a new processing platform in partnership with Logica plc, a United Kingdom-based technology and business-service company. The project will expand across 35 countries in Europe and Asia, according to Fleetcor.
“While this contract is not expected to have a material impact on FleetCor’s consolidated results of operations in the near term, we believe it is strategically very important, creating a partnership with Shell and providing a live and scalable reference point for other outsourcing opportunities worldwide,” Clarke stated in a press release detailing the company’s earnings.
During the analyst call, Clarke noted that with the migration of Shell Europe’s card business into 35 countries, “there’s lots of languages and a lot of bodies to do the data conversion. So we are always delighted to outsource that kind of work to an [information-technology] services specialist.”
Total transaction volume on FleetCor’s cards during the quarter was 48.9 million, generating $2.18 in revenue per transaction, down 0.6% from 49.2 million, or $2.10 per transaction, a year earlier. By region, North America transactions totaled 36.6 million ($1.87), up 0.5% from 36.4 million ($1.82). International transactions totaled 12.2 million ($3.13), down 0.5% from 12.8 million ($2.89).
Established in 2000, FleetCor serves some 750,000 business fleets and more than 3.5 million cardholders in North America, Europe, Asia and Africa under program brand names that include CCS, CFN, FleetNet, Fuelman, The Fuelcard Co., Keyfuels Mannatec and Smart.
The company’s stock initially sold for $25 per share. In midday trading Feb. 25, shares were selling for $32.35, down 0.43% from the previous day’s closing price of $32.49.
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