We are experiencing some temporary issues. The market data on this page is currently delayed. Please bear with us as we address this and restore your personalized lists.
Euronet Stock Up 2.5% Despite Q3 Earnings Miss on High Costs
Shares of Euronet Worldwide, Inc. EEFT have gained 2.5% since it reported third-quarter 2024 results on Oct. 23. Despite an earnings miss, the quarterly results benefited on the back of robust growth in high-volume low-value transactions in India, strong cross-border and direct-to-consumer digital transaction growth in the Money Transfer segment and expanding merchant services business. However, the upside was partly offset by inflationary pressures, rising operating expenses and adversities on the epay segment from limited promotional campaigns.
EEFT’s adjusted earnings of $3.03 per share fell short of the Zacks Consensus Estimate by 2.9%. Yet, the bottom line improved 11% year over year.
Total revenues amounted to $1.1 billion, which advanced 9% year over year and on a constant-currency basis. The top line beat the consensus mark by 3.6%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Euronet Worldwide, Inc. Price, Consensus and EPS Surprise
Euronet Worldwide, Inc. Price, Consensus and EPS Surprise
Euronet Worldwide, Inc. price-consensus-eps-surprise-chart | Euronet Worldwide, Inc. Quote
EEFT’s Q3 Update
EEFT’s net income of $151.6 million climbed 45.5% year over year. Operating income grew 9% year over year and on a constant-currency basis to $182.2 million.
Total operating expenses were $917.1 million, which escalated 9.6% year over year due to higher direct operating costs, salaries and benefits and selling, general and administrative expenses.
Adjusted EBITDA of $225.7 million rose 6% year over year and on a constant-currency basis.
EEFT’s Segmental Performances
The EFT Processing segment recorded revenues of $373 million in the third quarter, which advanced 8% year over year and 7% on a constant-currency basis. However, the metric missed the Zacks Consensus Estimate of $373.9 million.
Adjusted EBITDA rose 10% year over year and on a constant-currency basis to $142.1 million.
Operating income of $117.3 million improved 12% year over year and on a constant-currency basis. Total transactions climbed 34% year over year to 2,982 million on the back of improved high-volume low-value transactions across India.
Continued growth in travel, an improved merchant services business and expansion into new markets benefited the unit’s performance.
The epay segment’s revenues rose 10% year over year and on a constant-currency basis to $290.3 million. The reported figure surpassed the consensus mark of $265.5 million.
Adjusted EBITDA of $31 million increased 3% year over year and on a constant-currency basis .
Operating income grew 3% year over year and 2% on a constant-currency basis to $29.1 million. Transactions in the unit totaled 1,126 million, which climbed 22% year over year.
The segment’s quarterly results were aided by continued digital media and mobile growth, partly offset by inflationary headwinds and costs associated with launching new proprietary products.
The Money Transfer segment reported revenues of $438.2 million in the third quarter, which advanced 11% year over year and 10% on a constant-currency basis. The metric surpassed the Zacks Consensus Estimate of $423.4 million.
Adjusted EBITDA grew 6% year over year and 4% on a constant-currency basis to $64.1 million.
Operating income was $58.1 million, which improved 8% year over year and 7% on a constant-currency basis. Total transactions increased 11% year over year to 45.1 million as a result of higher cross-border transactions and direct-to-consumer digital transactions. However, the upside was partly offset by a decline in intra-U.S. transactions.
Corporate and Other expenses escalated 12.6% year over year to $22.3 million.
EEFT’s Financial Update (as of Sept. 30, 2024)
Euronet exited the third quarter with cash and cash equivalents of $1.5 billion, which improved 21.5% from the 2023-end level.
Total assets of $6.3 billion increased 6.7% from the figure at 2023-end.
Debt obligations, net of the current portion, amounted to $1.2 billion, which dropped 30.3% from the figure as of Dec. 31, 2023. Short-term debt was $1.1 billion.
Equity improved 9% from the 2023-end figure to $1.4 billion.
There was roughly $669.8 million left under EEFT’s revolving credit facilities at the third-quarter end.
EEFT’s 2024 Bottom-Line View Reaffirmed
Management continues to expect adjusted earnings per share (EPS) to record 10-15% year-over-year growth in 2024. Additionally, it anticipates achieving adjusted EPS growth in the 10-15% range in 2025.
Euronet’s Zacks Rank
Euronet currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Sector Players
Here are some other Finance sector players that have reported third-quarter results so far. The bottom-line results of Synchrony Financial SYF, The Goldman Sachs Group, Inc. GS and American Express Company AXP beat the respective Zacks Consensus Estimate.
Synchrony Financial reported third-quarter adjusted EPS of $1.94, which comfortably beat the Zacks Consensus Estimate of $1.77. The bottom line also increased from $1.48 per share a year ago. Net interest income improved 5.7% year over year to $4.6 billion . Also, it beat the consensus mark by 2.1%. Retailer share arrangements fell 6.6% year over year to $914 million. Total loan receivables of SYF grew 4% year over year to $102.2 billion. Total deposits were $82.3 billion, which rose 5.4% year over year.
The purchase volume of Synchrony declined 4% year over year to $45 billion. Interest and fees on loans of $5.5 billion improved 7% year over year. Net interest margin deteriorated 32 bps year over year to 15.04%. New accounts of 4.7 million slipped 18% year over year. Average active accounts remained stable at 70.4 million . Home & Auto period-end loan receivables climbed 3% year over year, while Digital period-end loan receivables rose 4% year over year.
Goldman Sachs reported third-quarter adjusted EPS of $8.40, which surpassed the Zacks Consensus Estimate of $6.85. This compares favorably with $5.47 reported in the year-ago quarter. The investment banking (IB) business witnessed solid growth. Equity underwriting fees jumped 25% and debt underwriting fees grew 45.8%. Also, advisory fees rose 5.3%. Overall, total IB fees were up 20% from the prior-year quarter to $2.27 billion.
Net earnings (GAAP basis) of $2.9 billion increased 45.3% from the prior-year quarter. Net revenues of $12.7 billion increased 7.5% from the year-ago quarter. Also, the top line surpassed the Zacks Consensus Estimate of $11.63 billion. The Asset & Wealth Management division generated revenues of $3.75 billion, up 16.2% year over year. Firmwide assets under supervision were a record $3.1 trillion, up 15.8% from the prior-year quarter. The Global Banking & Markets division has recorded revenues of $8.6 billion, which increased 6.8% year over year.
American Express reported third-quarter EPS of $3.49, which beat the Zacks Consensus Estimate by 6.7%. The bottom line climbed 6% year over year. Total revenues, net of interest expense, amounted to $16.6 billion, which marginally missed the consensus estimate. However, the top line improved 8.2% year over year. Network volumes of $441 billion rose 5% year over year on the back of higher consumer spending. Total interest income of $6.1 billion increased 17% year over year.
The U.S. Consumer Services segment’s pre-tax income of $1.7 billion improved 5% year over year in the third quarter. Total revenues net of interest expense climbed 10% year over year to $7.9 billion. The Commercial Services segment recorded a pre-tax income of $908 million in the quarter under review, which rose 7% year over year. The International Card Services segment reported a pre-tax income of $455 million in the third quarter, which rose 18% year over year. The Global Merchant and Network Services segment’s pre-tax net income of $991 million improved 1% year over year in the quarter under review.
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
