Fiserv Misses by a Penny

After the closing bell, Fiserv (FISV) reported Q4 earnings of $1.06 per share which was a penny below expectations. The market may not be pleased tomorrow by the earnings miss, but I’m not worried about one penny. My concern was a major miss and I thought that was a very remote possibility. In October, I wrote: “if they make less than $1 per share this quarter, we’ll know something went very wrong. In fact, if they made less than $1.04, it would be ugly.” So $1.06 is fine by me.

For all of 2010, the company earned $4.05 compared with $3.66 in 2009. Quarterly sales rose from $1.06 billion to $1.08 billion. In October, Fiserv’s full-year guidance was $3.96 to $4.07 per share. I had wanted them to at least raise the low end because it seemed very obvious that they would easily top that. As it turns out, they did.

The earnings miss is a disappointment, but not a major one. By far, the most important news is that Fiserv gave us full-year earnings guidance of $4.42 to $4.54 per share. Wall Street had been expecting $4.46.

I think we’ll see a lower open tomorrow but that’s just the Street being a drama queen. My view hasn’t changed at all. Even going by the low end, FISV is going for 14.1 times 2011’s estimate. That’s a good buy.

Posted by on February 3rd, 2011 at 11:07 pm


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