Fiserv Inc (NASDAQ: FISV) stock lost over 3.4% on 1st November, 2018 (as of 11:55 AM GMT-4; Source: Google finance) after the company posted weaker than expected earnings for the third quarter of 2018. FISV has completed its acquisition of the debit card processing, ATM Managed Services and MoneyPass® surcharge free network of Elan Financial Services, a unit of U.S. Bancorp. This acquisition with annual revenue of over $170 million, extends the company’s leadership and payments , broadens client reach and scale and provides new solutions to enhance the value proposition for our existing 3,000 debit solution clients.
FISV in the third quarter of FY 18 has reported the adjusted earnings per share of 75 cents, missing the analysts’ estimates for the adjusted earnings per share of 77 cents. The company had reported the adjusted revenue growth of 1 percent to $1.41 billion in the third quarter of FY 18, missing the analysts’ estimates for revenue of $1.43 billion. Free cash flow for the quarter was up 22% to $322 million and is over $800 million year-to-date, both of which include the divestiture impact of the Lending business. FISV continue to focus on share repurchase as the primary capital benchmark allocating $438 million in the quarter and for the year-to-date have repurchased $1.2 billion. Adjusted operating margin was 31.6 percent in the third quarter of 2018 compared to 32.6 percent in the third quarter of 2017, and was 32.2 percent in the first nine months of 2018 compared to 32.4 percent in the first nine months of 2017.
The company repurchased 5.6 million shares of common stock for $438 million in the third quarter, and 16.6 million shares of common stock for $1.23 billion in the first nine months of 2018. The company announced a new 30 million share repurchase authorization in the quarter and had 34.9 million remaining shares authorized for repurchase as of September 30, 2018.
Net cash provided by operating activities was $981 million in the first nine months of 2018, which did not reflect $419 million of sale proceeds from the Lending Transaction. Net cash provided by operating activities was $1.02 billion in the first nine months of 2017, which included cash distributions of $44 million from StoneRiver Group, L.P. (“StoneRiver”), a joint venture in which the company owns a 49 percent interest.
Looking forward to the full year, Fiserv continues to expect internal revenue growth of at least 4.5%. The company now expects its adjusted earnings to be in a range of $3.10 to $3.15 per share. Analysts currently estimate earnings of $3.14 per share.