In January of this year, Vantiv acquired Worldpay Group plc. As a result, the company changed its name and its ticker symbol on the NYSE from VNTV to WP. Together, Vantiv and Worldpay are creating a global payments company with the strength to compete across geographies. But the real questions are twofold. First, how did this newly renamed company perform in its final quarter as Vantiv alone? And second, what does the acquisition of Worldpay Group mean for this payment processing behemoth going forward? In today’s blog we’ll take a look at the answers to both of these questions…
With its recent acquisition, Worldpay, Inc. (WP)—the new moniker for this combined company after Vantiv acquired Worldpay Group—is now one of the largest payment processing and technology provers in the country. Worldpay offers a variety of point-of-sale (POS) systems that allow for credit and debit card payments, mobile payments, and gift and prepaid cards.
The company also provides online payment services, which range from fraud protection to analytics tools to technical support. Finally, Worldpay produces customized credit cards for financial institutions.
On Wednesday morning, Worldpay, Inc. posted its fourth-quarter results–its final quarter as Vantiv alone. Not surprisingly, these results topped the consensus estimate.
During the quarter, sales increased 13% year-over-year to $569 million, up from $502 million in the same quarter a year ago. The company’s adjusted earnings per share jumped 29.3% year-over-year to $0.97, compared with $0.75 per share in the fourth quarter of 2016. The analyst community was expecting earnings of $0.95 per share on $562.49 billion in sales, so Worldpay posted a 2.1% earnings surprise and a 1.2% sales surprise.
For fiscal year 2017, Worldpay reported adjusted earnings per share of $3.37 on $2.12 billion in sales. That represents 23.4% annual earnings growth and 11.4% annual sales growth. And these results were in line with analysts’ estimates for earnings of $3.36 per share on $2.12 billion in sales.
For fiscal year 2018, the now combined company expects sales between $825 million and $840 million, which represents 75.5% to 78.7% annual sales growth. Adjusted earnings per share are expected to range between $0.76 and $0.79, or 11.8% to 16.2% annual earnings growth.
So, it looks like Vantiv’s acquisition of Worldpay Group is paying off well for the newly denominated Worldpay, Inc.
Given the fourth-quarter earnings beat, WP shares bounced slightly higher in pre-market trading this morning. And with a solidly maintained B-rating in my Portfolio Grader system, WP remains a good buy.
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