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What's in the Cards for Fidelity National (FIS) in Q1 Earnings?

Fidelity National Information Services, Inc. FIS is slated to report first-quarter 2023 results on Apr 27, before the opening bell.

Q1 Estimates

The Zacks Consensus Estimate for Fidelity National’s first-quarter earnings per share (EPS) is pegged at $1.20, which indicates a decline of 18.4% from the prior-year quarter’s reported figure. We estimate EPS to drop 20.6% year over year to $1.17 in the to-be-reported quarter.

The consensus mark for revenues stands at $3,404 million, suggesting 2.5% fall from the year-ago quarter’s reported number. We project revenues to decrease 3.1% year over year to $3,381.8 million.

Earnings Surprise History

Fidelity National has a decent earnings surprise history. Its bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 0.62%. This is depicted in the chart below:

Fidelity National Information Services, Inc. Price and EPS Surprise

Fidelity National Information Services, Inc. Price and EPS Surprise
Fidelity National Information Services, Inc. Price and EPS Surprise

Fidelity National Information Services, Inc. price-eps-surprise | Fidelity National Information Services, Inc. Quote

What Our Quantitative Model Unveils

Our proven model predicts an earnings beat for Fidelity National this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.

Earnings ESP: Fidelity National has an Earnings ESP of +0.69% because the Most Accurate Estimate of $1.21 is pegged higher than the Zacks Consensus Estimate of $1.20. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: FIS carries a Zacks Rank of 2.

Factors to Note

Prudent investments in innovative technologies and an enhanced digital solutions suite are likely to have boosted operational efficiencies and expanded the customer base for Fidelity National in the first quarter. However, such technology upgrades escalate the expense level, which in turn, might have eroded its margins.

Feeble contributions from its Banking Solutions and Merchant Solutions segments are expected to have dampened FIS’s top-line growth. Lower-margin revenue mix and cost inflation might have acted as a common drag on the segments’ quarterly performance. Nevertheless, the downside is likely to have been partly offset by strong recurring revenues resulting from new client wins across the Banking Solutions unit and expanding transaction volumes within its Merchant Solutions business.

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The Zacks Consensus Estimate for the Banking Solutions unit’s first-quarter revenues is pegged at $1,619 million, which indicates a 1.6% decrease from the prior-year quarter’s reported figure. We expect the same to fall 2.3% year over year to $1,607.7 million.

The consensus mark for revenues in the Merchant Solutions segment stands at $1,073 million, suggesting a 3.5% decline from the year-ago quarter’s reported figure. We expect the same at $1,055.5 million, down 5.1% year over year.

In the first quarter, the Capital Market Solutions unit of Fidelity National is expected to have benefited on the back of growing sales volume, solid software sales and tactical cost-curbing initiatives. The Zacks Consensus Estimate for the segment’s revenues is pegged at $679 million, which implies growth of 3.2% from the prior-year quarter’s reported number. We forecast the same to improve 4% year over year to $684.2 million.

However, FIS’s bottom line might have suffered a blow due to escalating selling, general and administrative expenses in the to-be-reported quarter.

Other Stocks to Consider

Here are some other companies from the Business Services space, which according to our model, also have the right combination of elements to beat on earnings this time around:

Shift4 Payments, Inc. FOUR has an Earnings ESP of +21.25% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FOUR’s first-quarter 2023 earnings is pegged at 40 cents per share, which indicates an increase of nearly three-fold from the prior-year quarter’s reported number.

Shift4 Payments’ earnings beat estimates in each of the trailing four quarters, the average surprise being 21.53%.

Aptiv PLC APTV has an Earnings ESP of +4.11% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for APTV’s first-quarter 2023 earnings stands at 89 cents per share, indicating a 41.3% rise from the prior-year quarter’s reported figure.

Aptiv’s earnings beat estimates in two of the trailing four quarters, matched the mark once and missed the same once in the remaining one occasion, the average negative surprise being 8.68%.

Trane Technologies plc TT has an Earnings ESP of +0.92% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for TT’s first-quarter 2023 earnings is pegged at $1.33 per share, hinting toward a 18.8% improvement from the prior-year quarter’s reported figure.

Trane Technologies’ bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 8.23%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report

Trane Technologies plc (TT) : Free Stock Analysis Report

Aptiv PLC (APTV) : Free Stock Analysis Report

Shift4 Payments, Inc. (FOUR) : Free Stock Analysis Report

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