(Reuters) – Payments firm Fiserv on Wednesday beat Wall Street estimates for fourth-quarter profit, helped by strong demand in its banking and payments processing unit, sending its shares up 3.2% in premarket trade.
Consumer spending remained robust in the reported quarter, fueled by the Federal Reserve’s rate-cut cycle and hopes of a soft landing for the economy, where inflation falls without triggering a recession or significant job losses.
The Wisconsin-based company collects fees from merchants, banks and credit unions for processing transactions. Such fees are determined by consumer spending volumes.
Processing and services revenue, which makes up more than four-fifths of Fiserv’s revenue, rose 5.8% to $4.26 billion in the quarter.
Total revenue jumped 6.8% to $5.25 billion in the quarter, compared with analysts’ estimates of $4.96 billion, as per data compiled by LSEG.
On an adjusted basis, Fiserv earned $1.44 billion, or $2.51 per share for the quarter ended in Dec. 31, compared with $1.32 billion or $2.19 per share in the year-ago period.
Analysts were expecting a profit of $2.48 per share for the quarter.
The company also said it expects adjusted profit between $10.10 and $10.30 per share in 2025, compared with analysts’ estimates of $10.21 apiece. Fiserv also expects organic revenue growth in the range of 10% to 12% in 2025.
Shares of Fiserv gained 54.6% in 2024, compared with a 34.5% rise for peer FIS in the corresponding period.
(Reporting by Pritam Biswas in Bengaluru; Editing by Vijay Kishore)
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