FIS revises financial guidance for Q1 2020

Maria Nikolova

The company now estimates that it will generate revenue of $3,060 to $3,080 million during the first quarter of 2020, down from previously projected revenue of $3,180 to $3,210 million.

Financial services technology provider FIS (NYSE:FIS) has revised its financial guidance for the first quarter of 2020, with revenue growth set to be smaller due to the impact of Covid-19 but this negative impact is set to be partially offset by the effects of the acquisition of Worldpay.

Before the impacts from COVID-19 spreading across the globe, FIS achieved strong revenue growth. As spending declined, most markedly in travel, restaurants, entertainment, and retail, this has led to a rapid deterioration in payments volume and transaction trends on a worldwide basis beginning in March, 2020 which adversely impacted revenue in FIS’s payments businesses that earn transaction based fees.

Consequently, FIS now estimates that it will generate revenue of $3,060 to $3,080 million during the first quarter of 2020, which represents an increase of approximately 49% to 50% over the prior year period, primarily due to the acquisition of Worldpay. The company had previously projected revenue of $3,180 to $3,210 million during the first quarter of 2020, representing an increase of approximately 55% to 56% over the prior year period.

Organic revenue growth is now estimated to be 1% to 2% during the first quarter of 2020, including approximately $20 million in anticipated negative foreign exchange impact. Organic revenue growth was previously estimated to be 5% to 6% during the first quarter of 2020, including approximately $10 million in anticipated negative foreign exchange impact.

During the first quarter of 2020, FIS now estimates that its Merchant Solutions segment revenue will increase significantly over the prior year period, primarily due to the acquisition of Worldpay, with organic growth estimated to be approximately flat; its Banking Solutions segment revenue will increase approximately 7% over the prior year period with organic growth estimated to be approximately 1%; and its Capital Market Solutions segment revenue will increase approximately 9% over the prior year period with organic growth estimated to be approximately 7%.

Segment revenue growth is primarily being impacted by declines in payment processing volumes within the Merchant Solutions segment as well as lower issuer processing, debit network and account transaction volumes within the Banking Solutions segment.

During the first quarter of 2020, FIS now estimates that it will generate Diluted EPS of $(0.10) to $0.00 as compared to $0.45 in the prior year period and Adjusted EPS of $1.26 to $1.28 as compared to $1.16 in the prior year period. The company had previously projected Diluted EPS of $(0.15) to $0.00 and Adjusted EPS of $1.30 to $1.34 during the first quarter of 2020.

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