Payments processor FIS forecasts weak Q2 profit as spending slowdown concerns mount
WHY IT'S IMPORTANT
Consumer spending, which accounts for more than two-thirds of the U.S. economic activity, is feared to plummet amid resurfaced fears of stagflation from Trump's trade policy.
Several companies have withdrawn their outlook for the year, with economists warning that U.S. consumers are likely to bear the brunt of the trade war, facing higher prices on everything from sneakers to wine.
Lower spending volumes could hurt payment processors such as FIS that collect transaction fees from financial institutions and businesses.
BY THE NUMBERS
For the second quarter ending June 30, the company expects adjusted earnings per share in the range of $1.34 to $1.38, below analysts' estimates of $1.43, according to data compiled by LSEG.
The Jacksonville, Florida-based company, however, reiterated its forecast for full-year revenue and adjusted profit.
Revenue from the company's banking solutions business rose 2% to $1.7 billion in the quarter ended March 31, while its capital markets solutions revenue grew 8%.
On an adjusted basis, its net income was $643 million, or $1.21 per share, for the first quarter, up from $629 million, or $1.09 per share, a year ago.
Analysts had expected a profit of $1.20 per share.
WHAT'S NEXT
Last month, Fidelity solidified its offerings around services to financial institutions with an agreement to acquire Global Payments' issuer solutions unit, which offers card processing and account services, for $13.5 billion.
The agreement dramatically reshapes Fidelity, both in shifting its focus to doing business with banks but also shedding its remaining stake in Worldpay, which it acquired for $43 billion in 2019.
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