Positive fourth-quarter results bode well for Wright Express Corp., whose chief executive tells PaymentsSource the fleet card provider and issuer intends to carry the momentum into the new year.
“We see great strength moving into 2011,” Mike Dubyak, Wright Express CEO, said in a Feb. 10 interview. “You have to feel good about the trends in [international growth, rising gas prices and more spending on Wright’s MasterCards] and about the momentum moving forward.”
The South Portland, Maine-based company during the quarter closed on a U.S. deal with ConocoPhillips to provide private-label fleet card services that went live Jan. 1, Dubyak noted. The company also expects to expand its international commercial fuel card processing deal with BP International from New Zealand into Australia within the next 30 days, he noted.
The BP contract also “gives us the ability to work with them in other parts of the globe,” Dubyak says. “There’s nothing locked in yet, but the dialogue is there.”
“And we are pursuing some others,” Dubyak told analysts during a Feb. 10 conference call to discuss earnings.
Also during the earnings call, Dubyak cited growth in spending on the company’s MasterCard product as a “significant growth engine” this year, also noting Wright’s plans to increase purchase volume on the cards and to pursue new prepaid products. The company’s prepaid initiatives currently involve merchant cards in Australia, but during the interview Dubyak cited the potential to expand into network-based initiatives through its relationship with MasterCard.
To help fuel the company’s international growth plans, Wright Express on Jan. 11 announced the hiring of Gareth Gumbley as executive vice president of Wright Express International to oversee the company’s efforts to expand into new markets (
The fleet card issuer reported $114.9 million in total revenue for the quarter ended Dec. 31, up 38.4% from $83 million during the same period last year. Net income was $18.5 million, up 52.9% from $12.1 million.
MasterCard payment-processing revenue totaled $12.3 million, up 39.8% from $8.8 million. Holders of the Wright Express MasterCards spent $1.2 billion during the quarter, up 52.6% from $786.5 million a year earlier. The net interchange rate was 1.01%, down 11 basis points from 1.12%, while the net processing rate was 1.73%, down two basis points from 1.75%.
Payment-processing transactions increased by 14.1%, to 57.3 million from 50.2 million. Fleet payment-processing revenue grew by 27.7%, to $60.4 million from $47.3 million.
The average number of vehicles serviced during the quarter was 4.8 million, up 4.3% from 4.6 million a year earlier. The average fuel price for the quarter was $2.78 per gallon, up 7.8%, from $2.58 per gallon a year earlier.
The average number of vehicles services worldwide grew by 17% during the quarter, to 5.4 million, according to Wright Express.
Though Wright executives anticipated a relatively soft first quarter in terms of earnings per share, in an analyst report, J.P. Morgan downplayed the projection based on their historic conservative forecasting. The company labeled Wright stock as neutral, meaning it expects the stock to perform in line with the average return of stocks within its portfolio.
In midday trading Feb. 10, Wright Express shares were selling at $51.73, up 3.4% from the previous day’s $50.04 closing price.
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