Corporate payment services provider Wex Inc. of South Portland reported strong earnings growth for the second quarter, aided in part by higher fuel prices and lower corporate taxes.
The company also said it plans to hire an additional 175 employees in Maine by the end of this year as a result of new contracts with fuel producers Shell Oil Co. and Chevron Corp.
Wex reported Thursday that its revenue for the second quarter was $370.9 million, a 22 percent increase from $303.9 million for the second quarter of 2017. Of the $67 million increase for the quarter, $16.6 million was the result of higher fuel prices, the company said.
The company reported quarterly adjusted net income of $90.8 million, or $2.09 per share, an increase of 66 percent from $54.2 million, or $1.26 per share, in the second quarter of 2017.
Wex’s adjusted net income beat analyst expectations by 4 cents per share, and its revenue beat expectations by $4.7 million, according to the investor website Seeking Alpha.
“I am pleased to report another strong quarter and a successful first half of the year, highlighted by top- and bottom-line results above our guidance range with strong contributions from each of our business segments,” said Wex President and CEO Melissa Smith. “We remain focused on our sustained ability to leverage our talent and technology to bring compelling business-to-business products to market, which is allowing us to continue to sign new customers, retain and grow our current base, and ultimately drive profitable growth.”
Smith said the bulk of the company’s revenue and earnings growth in the second quarter came from sales increases in its travel and corporate services and its fleet services divisions. The travel and corporate payments business increased by 38 percent from a year earlier, while the fleet payments business was up by 21 percent, she said. Sales growth overseas was particularly strong in Europe, Asia and Brazil, Smith said.
Increased fuel prices, which boost Wex’s revenue from fuel payment transactions, and a reduction in the company’s corporate tax rate from 37 percent to 26 percent also contributed to quarterly earnings growth, but to a lesser extent, company officials said. Smith said recently imposed tariffs had no direct impact on the company’s performance, but that they could have an indirect impact if the tariffs negatively affect Wex’s clients.
Before adjustments for one-time charges and credits, Wex’s net income for the second quarter was $39.3 million, or 90 cents per share, up 125 percent from $17.1 million, or 40 cents per share, in the second quarter of 2017.
Smith attributed the company’s continued growth to the strength of its employees and their ongoing efforts to develop products and services that clients want.
Wex provides payment-processing services for vehicle fleets, online travel services and health care and employee benefits providers. It has about 1,050 employees at its headquarters in South Portland and about 3,500 worldwide.
The company plans to relocate its headquarters to a 100,000-square-foot, four-story building near the Portland waterfront in the first quarter of 2019, but said it will continue to maintain a presence in South Portland.
Wex is a publicly held company that trades on the New York Stock Exchange under the symbol WEX. The value of Wex shares fell about 1 percent to $188.94 in trading Thursday after the release of the earnings report.
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