Fidelity National Information Services Inc. revised its financial guidance for the first quarter based on the impacts of the coronavirus outbreak.
The company now estimates a loss per share of 10 cents to zero cents for the first quarter, while adjusted EPS is expected to be $1.26 to $1.28. Fidelity National Information Services previously projected a loss per share of 15 cents to zero cents, while adjusted EPS was anticipated to be between $1.30 and $1.34.
In a news release, Fidelity National Information Services said that as U.S. and foreign governmental authorities imposed social distancing, shelter-in-place or total lockdown orders, spending declined, most notably in travel, restaurants, entertainment and retail, resulting in a rapid deterioration in payments volume and transaction trends on a worldwide basis beginning in March. This adversely impacted revenue in the company's payments businesses that earn transaction-based fees.
Consequently, Fidelity National Information Services now estimates revenue for the first quarter will be between $3.06 billion and $3.08 billion, representing an increase of approximately 49% to 50% over the prior-year period, primarily due to the acquisition of Worldpay Inc. Organic revenue growth during the first quarter is estimated to be 1% to 2%, including about $20 million in anticipated negative foreign exchange impact.
Fidelity National Information Services had previously projected revenue of $3.18 billion to $3.21 billion for the first quarter. Organic revenue growth for the period was expected to be between 5% and 6%, including about $10 million in anticipated negative foreign exchange impact.
Due to the speed at which the coronavirus situation is developing and the unknown duration of the pandemic, the company withdrew its financial guidance for the full year. It expects to provide further updates and details on its first-quarter earnings call.
In response to coronavirus pandemic, Fidelity National Information Services is taking several steps to manage discretionary expenses and achieve cost synergies, including limiting travel, reducing incentive compensation and decreasing third-party spending as well as accelerating automation and functional alignment across the organization.
The company is leveraging its real-time lending service to enable financial institutions to process loans under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act. It is issuing additional prepaid electronic benefits transfer cards to help families safely receive their government benefits.
The company is waiving monthly minimum fees for April for its U.S. and U.K. merchant clients and providing other value-added services for free, including virtual terminals to enable merchants and retailers to accept secure phone and card-not-present transactions. It also created an online resource center to provide clients with options and information to adapt and rebound in the face of COVID-19.