Wex (NYSE:WEX), a company that provides "fleet management solutions" (fuel cards, account management, and so on) to operators of large car and truck fleets, reported Q2 2020 results this morning. The news was not great, and shares are down 9% as of 10:55 a.m. EDT.
Heading into the report, analysts had forecast EPS of $1.38 on sales of $347.6 million for Wex, but the company missed on both points. Sales fell just shy of estimates -- down 21% year over year to $347.1 million -- but earnings were far less than anticipated, plunging 47% to only $1.21 per share.
That's the bad news. The good news is that $1.21 was a pro forma number. When calculated according to generally accepted accounting principles (GAAP), Wex actually earned a respectable $1.66 per share -- more than five times what it earned in the year-ago period.
The average number of vehicles serviced in the quarter grew 8%, but those vehicles were driving less during widespread stay-at-home orders, such that total fuel transactions declined 17%, and total payment processing transactions fell 19%. Travel and corporate solutions transactions plummeted 68% as corporate travelers mostly stayed home.
Nor is it clear that things will get better anytime soon. Having already withdrawn its financial guidance for the year back in May, Wex declined to reinstate guidance today, citing "the continued uncertainty related to COVID-19."
For what it's worth, analysts see sales shrinking 16% and profits plunging a further 27% in Q3. Wall Street expects full-year sales to drop 9%, resulting in EPS of $7.15 -- down 22% year over year.