Why Fidelity National Information Services Stock Is Diving Today

Fidelity National Information Services, Inc FIS shares are trading lower Monday after the company reported fourth-quarter financial results and issued a weak forecast well below analyst estimates. 

What Happened: Fidelity National said fourth-quarter revenue increased 1% year-over-year to $3.71 billion, which beat consensus estimates of $3.68 billion, according to Benzinga Pro. The fintech solutions company reported quarterly adjusted earnings of $1.71 per share, which beat estimates of $1.70 per share.

"2023 marks a year of recommitment for FIS, recommitting to our strengths in delivering on our cloud-native and digitally-focused solutions encompassing core, lending, risk, payments and trading platforms to help our clients innovate faster and achieve their growth," said Stephanie Ferris, president and CEO of Fidelity National.  

Despite turning in better-than-expected fourth-quarter results, Fidelity National provided a very soft outlook. The company said it sees first-quarter revenue between $3.375 billion and $3.425 billion versus estimates of $3.57 billion. The company expects first-quarter adjusted earnings of $1.17 to $1.23 per share versus estimates of $1.42 per share.

Fidelity National sees full-year 2023 revenue between $14.2 billion and $14.45 billion versus estimates of $15.01 billion. The company expects full-year adjusted earnings to be in a range of $5.70 to $6 per share versus estimates of $6.57 per share.

Fidelity National also announced plans to spin off its merchant business, Worldpay.

"In evaluating a broad range of alternatives as part of our previously announced comprehensive assessment of FIS' strategy, businesses, operations, and structure, FIS management and the Board concluded that the spin-off of Worldpay will unlock shareholder value by improving both companies' performance, enhancing client services, and simplifying operational management," said Jeffrey A. Goldstein, chairman of the company's board. 

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FIS Price Action: Fidelity National shares are down 15.3% at $63.95 at the time of writing, according to Benzinga Pro.

Photo: Tayeb MEZAHDIA from Pixabay.