(Reuters) – Banking and payments processing conglomerate Fidelity National Information Services raised its forecast for annual adjusted profit and posted a 49% jump in its first-quarter profit on Monday, helped by resilient consumer spending.
WHY IT IS IMPORTANT
Payment processors such as FIS collect transaction fees from financial institutions and businesses that are strongly correlated with consumer spending volume.
A tight labor market and rising wages have afforded job security to U.S. residents, allowing them to continue spending on shopping, travel and dining out.
KEY QUOTE
“We are off to a very strong start in 2024. This marks the fifth straight quarter of exceeding our financial outlook, and we are pleased with the continued new sales momentum we are seeing across the business,” said FIS CEO Stephanie Ferris.
BY THE NUMBERS
– FIS now expects annual adjusted profit per share to be between $4.88 and $4.98, higher than its previous forecast of $4.66 to $4.76.
– The company also forecast adjusted profit to be between $1.21 and $1.25 per share in the second quarter, above analysts’ average expectation of $1.15 per share, according to LSEG data.
– The company’s adjusted net income from continuing operations, which includes businesses other than the Worldpay merchant solutions business, rose 49% to $635 million for the quarter ended March 31.
– Revenue from the banking solutions business, which offers core processing and transaction processing software to financial institutions, rose 2% from a year earlier to $1.68 billion.
MARKET REACTION
Shares of the company jumped 3.1% in extended trading. The stock has risen 17.3% so far this year, as of its last close.