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Fiserv posts Q4 net income rise

09 February 2017  |  3289 views  |  0 Source: Fiserv

Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the fourth quarter and full year 2016.

Fourth Quarter and Full Year 2016 GAAP Results

GAAP revenue for the company increased 5 percent in the fourth quarter to $1.43 billion, driven by 7 percent growth in the Payments segment and 2 percent growth in the Financial segment, compared to the fourth quarter of 2015. Full year GAAP revenue for the company increased 5 percent in 2016 to $5.51 billion, driven by 8 percent growth in the Payments segment and 1 percent growth in the Financial segment, compared to the prior year.

GAAP earnings per share was $0.98 in the fourth quarter of 2016 and $4.15 for the full year, increasing 21 percent and 39 percent, respectively, compared to the prior year periods. GAAP earnings per share for the full year included a net investment gain of $0.39 per share in 2016 driven by the sale of a business interest at StoneRiver Group, L.P. ("StoneRiver"), a joint venture in which the company owns a 49% interest, and debt extinguishment and refinancing costs of $0.25 per share in 2015.

GAAP operating margin was 26.1 percent in the fourth quarter of 2016 and 26.2 percent for the full year, increasing 210 basis points and 130 basis points, respectively, compared to the prior year periods.

Net cash provided by operating activities for the full year was $1.43 billion in 2016 compared with $1.35 billion in the prior year, an increase of 6 percent.

"Results in 2016 were punctuated by our 31st consecutive year of double-digit adjusted earnings per share growth, operating margin expansion and excellent free cash flow," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "Our strong sales performance sets us up to accelerate internal revenue growth in 2017."

Fourth Quarter and Full Year 2016 Non-GAAP Results and Additional Information

  • Adjusted revenue increased 5 percent both in the fourth quarter and for the full year to $1.35 billion and $5.21 billion, respectively, compared to the prior year periods.
  • Internal revenue growth for the company both in the fourth quarter and for the full year was 4 percent, driven by 6 percent growth in the Payments segment and 2 percent growth in the Financial segment in each period.
  • Adjusted earnings per share increased 16 percent in the fourth quarter to $1.16 and 14 percent for the full year to $4.43 compared to the prior year periods.
  • Adjusted operating margin expanded 140 basis points to 32.1 percent in the fourth quarter and 50 basis points to 32.2 percent for the full year compared to the prior year periods.
  • Free cash flow increased 8 percent to $1.08 billion for the full year compared to the prior year. Cash distributions from StoneRiver of $151 million in 2016 related to the sale of a business interest have been excluded from the company's free cash flow results.
  • Sales performance increased 22 percent in the fourth quarter and 21 percent for the full year compared to the prior year periods.
  • The company repurchased 11.9 million shares of common stock for $1.20 billion in 2016, which included 2.6 million shares of common stock for $265 million in the fourth quarter. The company announced a new 15 million share repurchase authorization in the quarter and had 20.5 million remaining shares authorized for repurchase as of December 31, 2016.
  • In January 2017, the company completed its acquisition of Online Banking Solutions, Inc., gaining additional cash management and digital business banking capabilities, which complement and enrich the company's existing solutions.

Outlook for 2017

Fiserv expects internal revenue to grow in a range of 4 to 5 percent. The company also expects adjusted earnings per share in a range of $5.03 to $5.17, which would represent growth of 14 to 17 percent over $4.43 in 2016.

"We enter 2017 with market momentum and a focus on providing high-value, differentiated experiences that enhance growth for our clients and value for our shareholders," said Yabuki. 

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