Fleet card provider Wright Express’ execution of a multipronged strategy for revenue growth paid dividends with significant boosts in first-quarter revenues and profit. Investors, however, didn’t seem impressed.
Total revenues for the three months ended March 31 were $140.1 million, up 16.7% from $120.1 million. Net income was up 77.3%, to $32.8 million from $18.5 million.
“We feel very comfortable with the platforms we’ve established and plan to continue growing,” Mike Dubyak, Wright Express CEO, told PaymentsSource in a May 2 interview.
Helping fuel the revenue growth was the company’s Other Payment Solutions business, which includes online travel initiatives with Priceline and Expedia, Dubyak said, noting the company also signed on two smaller online travel sites in Europe. The unit, which includes Wright Express’ new payroll card (see story), generated revenue of $31 million, up 43.5% from $21.6 million. Payment-processing revenue was $20.2 million, up 38.4% from $14.6 million. Transaction-processing revenue was $2 million, up 5% from $1.9 million.
Total corporate card purchase volume grew 57%, to $2.2 billion from $1.4 billion. The net interchange rate for the quarter was 0.9%, down from 1.01%, because of rising gas prices, Dubyak said.
Those fuel-price increases helped to drive revenues, however, he noted. Domestic retail fuel prices rose 10.1%, to an average of $3.72 per gallon from $3.38 a year earlier. The average fuel price in Australia was US$5.80, up 9% from US5.32. The average number of vehicles services worldwide was up13%, to 6.7 million.
Fleet’s Payment Solutions total revenue was $73.9 million, up 12.5% from $65.7 million. Within that division, fleet payment-processing transactions totaled 60.6 million, up 2.9% from 58.9 million. Transaction-processing revenue where Wright Express does not own the receivables totaled $3.98 million, up 2.6% from $3.88 million.
Same-store sales were own 0.5% as the weak economy affected travel, Dubyak said.
Though the service isn’t driving revenue per se, the company launched a mobile application for iPhones and Android devices called Octane. Drivers may use the app to find the location selling the cheapest gas nearby, Dubyak said.
“We’re getting real-time transactions from those stations,” he said. “It’s things like that we want to offer to continue to be a leader in and hopefully drive new customer opportunities in the future.”
In midday trading May 2, shares of Wright Express stock on the New York Stock Exchange were selling for $59.48, down 7% from the previous day’s $63.98 closing price.
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