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Can FIS Meet Expectations in 4Q16?

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Upcoming earnings announcement

Fidelity National Information Services (FIS) is slated to report its 4Q16 results on February 7, 2017. Wall Street analysts expect it to post EPS (earnings per share) of $1.14, a rise of 23.0% year-over-year.

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FIS and its peers

In 2016, FIS stock outperformed the financial sector as well as the broad market. The Financial Select Sector SPDR ETF (XLF), which represents the financial sector, has risen 22.0%. In comparison, FIS has risen 25.0% so far this year. FIS’s peers Fiserv (FISV) and Jack Henry & Associates (JKHY) have risen 16.0% and 14.0%, respectively, in 2016.

Company overview

FIS provides software solutions to banks and financial institutions. According to the company’s website, it’s “the world’s largest global provider dedicated to banking and payments technologies.”

Modern financial institutions typically need the kind of software solutions FIS provides, thus making the demand for its products fairly steady and secure. The company operates on long-term client contracts. The result is recurring, steady revenues.

Sound revenues provide a strong foundation for the company’s operations. They also help FIS grow inorganically through acquisitions and enable it to reward shareholders with dividends and share repurchases.

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