Wright Express Drops After Lower Guidance

I nearly let Wright Express’ ($WXS) earnings report pass without comment. Yesterday, Wright reported Q2 earnings of $1.00 per share which was two cents above estimates. Interestingly, investors were upset in May when Wright gave guidance for Q2 of 92 to 98 cents per share. Now we know that the company was probably being conservative.

“We are pleased with our second quarter results as steady execution against our multi-pronged growth strategy led to further expansion in our core fleet business and strong performance in our other payments segment,” commented Michael Dubyak, Chairman, President and Chief Executive Officer. “In our fleet business, we drove strong vehicle growth through the signing of new customers, in spite of the sluggish U.S. economy. We also made considerable progress towards diversifying our business as we penetrated new verticals with our single-use virtual card and continued to build out our geographic footprint with the acquisition of CorporatePay. While we foresee fuel prices becoming a headwind in the second half of the year, we remain confident in our long term prospects. Furthermore, we plan to continue to invest in our business as fundamentals remain strong and opportunities for growth persist.”

The bad news, however, was poor guidance. For Q3, Wright sees earnings ranging between $1.08 and $1.15 per share. The Street had been expecting $1.18 per share. For the full year, Wright lowered its previous range of $4.10 – $4.30 per share, to a new range of $4.10 – $4.15 per share.

In May, Wright had raised its revenue guidance for the year from $590 million – $610 million to a new range of $602 million – $617 million. Now Wright lowered it back down to $591 million – $601 million.

The CFO said: “Our updated guidance for the full year of 2012 predominately reflects the impact of lower fuel prices, coupled with an adverse impact from foreign currency movements and slight dilution from the acquisition of CorporatePay. Given the economic environment, we are also anticipating softness in our same store sales to persist.”

Posted by on August 2nd, 2012 at 12:48 pm


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