Fidelity National Information Services Inc., or FIS, nosedived after reporting fourth-quarter revenue higher than the previous year but below analysts’ expectations.
The Jacksonville-based financial technology company said revenue grew 3% to $2.6 billion but that was 1.3% below the consensus forecast of analysts, according to Zack’s Investment Research.
The stock dropped as much as $15.11 to $67.55 Feb. 11 after the report, its lowest level in nearly a year, and ended the week down 17%.
That was the second-worst performance of the week by stocks in the S&P 500 index, according to investment website Seeking Alpha.
“This is a talented management team (CEO + CFO) that delivered areas of strength,” Susquehanna Financial Group analyst James Friedman said in a research note.
However, Friedman and other analysts said FIS produced disappointing results in its core banking technology business, which accounts for about 66% of total revenue.
Friedman downgraded his rating on FIS from “positive” to “neutral.”
“In a tough end market with uneven bank IT budgets, it is unclear if and when management can move back on track,” he said.
“And FIS appears to be encountering a number of free cash flow challenges, which, when coupled with weak reported margins, may be predictive. This company needs time to reconfigure.”
In the company’s conference call with analysts, CEO Stephanie Ferris expressed satisfaction with FIS’ performance a year after selling off a majority stake in its Worldpay payment technology subsidiary, which had been a drag on the company.
“While there is still much work to do, the actions we’ve taken to refocus the company are driving improved financial outcomes and delivering greater value to all of our stakeholders,” Ferris said.
“Revenue growth accelerated from 3% to 4% in 2024 and while this was slightly below our expectations due to some onetime items, growth in new sales, including a 10% increase in amplified cross sales and improved commercial excellence across our client base, leave us confident in further acceleration in 2025,” she said.
Revenue for all of 2024 rose by an adjusted 4% to $10.1 billion and adjusted earnings rose 46% to $2.9 billion, or $5.22 a share.
FIS is projecting 2025 revenue of $10.435 billion to $10.495 billion, with adjusted earnings projected at $5.70 to $5.80 per share.
Keefe, Bruyette & Woods analyst Vasu Govil maintained an “outperform” rating and lowered her price target by $10 to $92, but said the sell-off in the stock was overdone.
“The sell-off reflects a noisy print with many one-timers and implementation delays leading to 4Q revenue miss and a weaker start to the year and Banking segment revenue acceleration now delayed to 2Q25,” Govil said in her note.
However, “the underlying fundamentals of the business are unchanged with the company on track to deliver on targets set at the investor day,” she said.
“Onus is now on management team to prove the predictability of their recurring revenue streams and deliver on the 2Q acceleration for the market to regain confidence.”
Proficient Auto Logistics Inc. reported lower revenue and earnings for the fourth quarter, as the Jacksonville-based company, which transports automobiles from manufacturers to dealers, continued to feel the impact of industry weakness.
Proficient went public in May 2024 and was formed by merging five auto transport companies. It said fourth-quarter revenue fell 16% from the combined 2023 results of the five companies to $95.1 million.
Adjusted operating income dropped 82% to $1.6 million.
“The macro auto industry environment in the fourth quarter was largely a continuation of the weakness we described in the third quarter,” CEO Rick O’Dell said in Proficient’s Feb. 11 conference call.
“October unit volumes were relatively strong, up approximately 6% versus the same month in 2023. But by mid-November, the pace of volumes slowed, ending down 4% for the quarter versus the fourth quarter of 2023.”
O’Dell said Proficient is hoping to gain market share as original equipment manufacturers make decisions on contracts with transport companies.
“There are several OEMs in the midst of scheduled regional or national bid processes,” he said.
“A meaningful amount of new vehicle volume transportation is being decisioned across the OEM landscape this year. Proficient is positioning itself and competing for incremental market share that should be sustainable and accretive to our portfolio over the long term.”
Firehouse Subs reported higher sales as parent company Restaurant Brands International Inc. expanded the chain, but comparable sales at restaurants open for more than a year remained flat.
Fourth-quarter sales rose 5.4% to $315 million, as the chain grew by 80 stores in 2024 to 1,345.
However, comparable-store sales rose only 0.3%.
For the full year, total sales rose 2.7% to $1.23 billion but comparable-store sales fell 1.1%.
RBI Chief Executive Josh Kobza said in the company’s Feb. 12 conference call he was encouraged by improving sales trends in the fourth quarter.
“This was driven by the successful launch of our hot sauce bar and the introduction of delicious menu innovations such as our Thanksgiving and French dip subs as well as strong performance in Canada,” he said.
Toronto-based RBI acquired Jacksonville-based Firehouse for $1 billion in December 2021.
“On the development side, after several years of laying important foundational groundwork, including development team investments moving away from our legacy area developer arrangements and introducing targeted development incentive programs, we are now seeing real acceleration in net restaurant growth,” Kobza said.
“Looking ahead, our development pipeline for 2025 is even stronger, reinforcing our confidence in delivering another year of accelerated expansion,” he said.
Firehouse announced Feb. 18 it will open restaurants in Australia, its first entry into the Asia-Pacific region.
RBI also owns the Burger King, Popeyes and Tim Hortons restaurant chains.
Sales from all four brands rose 5.4% to $44.5 billion in 2024 with comparable sales up 2.3%.
GEE Group Inc. reported lower revenue for its first quarter ended Dec. 31, because of a “malaise in demand” for staffing services, the Jacksonville-based company said in a news release.
Revenue fell 15% to $26 million and the company reported an adjusted net loss of $560,000 in the quarter.
“Beginning in the second half of 2023, throughout 2024, and so far in 2025, we have encountered and continue to face very difficult and challenging conditions in the hiring environment for our staffing services,” CEO Derek Dewan said in a Feb. 14 conference call, according to a company transcript.
“These have stemmed from what is now acknowledged as over hiring that took place in 2021 and 2022, in the immediate aftermath of the pandemic, and the macroeconomic uncertainty, interest rate volatility and inflation that followed. These conditions have produced a near universal cooling effect on U.S. employment, including businesses’ use of contingent labor and the hiring of full-time personnel,” he said.
“Since 2023, many client initiatives, such as IT projects and corporate expansion activities requiring additional labor, in general, have been put on hold. Instead, many of the businesses we serve have implemented and proceeded with layoffs and hiring freezes, and in many cases have focused on retaining their existing employees rather adding new ones.”
GEE Group has been taking steps to improve results, including a reduction in expenses and seeking to expand through acquisitions.
After the quarter ended, GEE Group acquired an Atlanta-based company called Hornet Staffing Inc. on Jan. 3.
“We expect the Hornet acquisition to enhance our ability to compete more effectively and anticipate it helping to secure new business from Fortune 1000 and other large users of contingent and outsourced labor,” Dewan said.
CSX Corp. announced Feb. 12 its board of directors approved an increase in its quarterly dividend from 12 cents to 13 cents a share.
This is the fourth straight year the Jacksonville-based railroad company raised the quarterly dividend by a penny.
A private equity firm acquired Spray EZ Equipment and Coatings Inc., or SprayEZ, according to a Feb. 14 news release by SprayEZ’s financial adviser, Heritage Capital Group Inc.
SprayEZ makes and distributes spray foam insulation rigs and supplies out of facilities in Yulee and Oklahoma City.
Cincinnati-based Roebling Capital Partners, a private equity fund focused on lower middle market companies, bought SprayEZ.
Terms of the deal were not announced.
Amid market rumors the company is in talks about a possible sale, Paysafe Ltd. said it expects to report improved financial results for 2024.
The London-based payments processing company, which has its North American headquarters in Jacksonville, said it expects to report net income of $19 million to $25 million for the year, reversing a loss in 2023.
Revenue rose 6% to an estimated $1.7 billion, it said.
Paysafe said it expects revenue to grow by 6.5% to 8% this year.
Bloomberg News reported Feb. 6 that Paysafe was talking to potential acquirers, but it gave no details.
Paysafe’s stock rose as much as $4.30 to $24.11 Feb. 6 but the stock has since fallen back below $20, where it was before the Bloomberg story.
Paysafe has not commented on the report.
Paysafe also announced an agreement to sell its direct marketing payment processing business line to KORT Payments, a Toronto-based company run by Paysafe co-founder and former CEO Joel Leonoff.
Paysafe had previously said it was looking at alternatives for the direct marketing unit, which is a noncore business for the company.