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FIS Announces 4Q16 Earnings: Were They Good Enough?

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FIS’s 4Q16 earnings

On February 7, 2017, Fidelity National Information Services (FIS) reported 4Q16 adjusted EPS (earnings per share) of $1.14, which was in line with analysts’ estimates. Its earnings rose 23.0% year-over-year. However, FIS stock fell 3.0% after the earnings release.

Gary Norcross, FIS’s president and chief executive officer, said, “One year after the acquisition of SunGard, the combination is surpassing our goals on all dimensions.” He added, “FIS delivered a consistently strong performance in 2016, exceeding our original expectations on every meaningful measure.”

Company overview

FIS is a provider of software solutions to banks (XLF) and financial institutions. According to the company’s website, it’s “the world’s largest global provider dedicated to banking and payments technologies.” Its closest competitors are Fiserv (FISV) and Jack Henry & Associates (JKHY).

Any modern financial institution needs the kind of software solutions that FIS provides, thus making the demand for its products fairly steady and secure. FIS operates on long-term contracts with clients that generate recurring, steady revenues. That provides a strong foundation for FIS’s operations and enables it to reward its shareholders with dividends and shares repurchases and grow inorganically through acquisitions.

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