FleetCor (FLT) Reaches 52-Week High on Strong Q2 Results

On Aug 13, 2014, FleetCor Technologies Inc. FLT scaled a 52-week high of $142.90 after posting strong second-quarter financial results, which included a 0.83% positive earnings surprise. With respect to earnings trend, this financial services provider has delivered positive earnings surprises in three of the last four quarters with an average beat of 2.13%. 

 

In fact, shares of FleetCor rose nearly 7.1% over the last few trading sessions to close at $142.10, since the company reported second-quarter earnings results on Jul 31, 2014. Furthermore, the year-to-date return of the stock is 21.28%, much above the S&P 500's return of 5.32% as well as that of other players in the insurance industry like Visa Inc. V and MasterCard Inc. MA that generated returns of –5.04% and –8.66%, respectively over the same period.

 

During the second quarter, FleetCor's top line increased 26% year over year on strong performance of the U.S. direct business, CLC business and U.K. fuel card business. The acquisitions in 2013, including VB Brazil, Epyx in the U.K. and NexTraq also contributed to the increased revenues. Segmental growth contributed to an impressive improvement in FleetCor's transaction volumes.

 

A robust performance during the second quarter prompted management to raise its 2014 earnings and revenue guidance. The current adjusted net income guidance for 2014 is $5.04–$5.10 per share, higher than the Zacks Consensus Estimate of $4.81. On the other hand, the current revenue guidance for 2014 is $1.082–$1.097 billion. The Zacks Consensus Estimate for 2014 is $1.082 billion, representing the lower end of the guided range. 

 

Other positive tidings at the company that contributed to the 52-week high were the joint venture with growth equity investor, Summit Partners to acquire Europe's eminent telematics solutions provider, Masternaut Group Holdings Limited and the deal to acquire Shell's fuel card customer portfolio in Germany during the second quarter.

 

Additionally, the recent announcement to acquire Comdata Inc., the electronic payment processor from Fidelity National Financial Inc. FNF, is making headlines owing to the immense opportunity it holds in terms of boosting Fleetcor's payments business in the near and long term. 

 

Currently, FleetCor carries a Zacks Rank #2 (Buy).