Shares of Fidelity National Information Services (FIS) were down 3 percent in midday trading after the financial firm reported results that were largely in line with Wall Street expectations.
Adjusted earnings per share came in at $1.14, meeting estimates, while revenues were just a bit shy of The Street at $2.44 billion versus the expected $2.47 billion. Organic revenue growth was about 4.8 percent, the company said.
Looking forward, the company said it expects to see earnings in the current year range from $4.15 to $4.30, off of the 2016 level of $3.82. That brackets, at the high end, the $4.29 analysts expect from FIS’ bottom line. Top-line growth on an organic basis, said management, should be between 2 percent and 3 percent.
Integrated Financial Services, the largest unit, at $1.2 billion of sales, was up 18 percent when the Sungard acquisition was factored in, and organic revenue growth was expected to be 3–4 percent.
In comments made to analysts on the heels of the results announcement via conference call, FIS CEO Gary A. Norcross said the firm continues to consolidate its data centers, with movement toward cloud deployment and with a doubling of servers working in the cloud by the end of this year. Digital and core banking, said the executive, via the second largest segment, have seen 5 percent revenue growth and stand at the high end of the three-year projections for that trend. Lapping EMV growth will, however, prove more difficult as time moves on from the initial adoption period.
Asked about the bigger picture on financial regulation impact and the rollback of Dodd-Frank, he said that, in terms of guidance, “we’ve been very conservative and assume that there’ll be no impact. We do believe that, if some regulatory reform did occur, that you could see some improvement in IT spending in financial institutions but also keep in mind the nature of our sales cycles, the nature of our implementation windows. You really wouldn’t start seeing any of that impact really until 2018.”
Separately, in reference to the demonetization and removal of large swaths of cash from India’s economy, he told analysts that 90 percent of the firm’s ATMs in that country have been converted to new currencies.