Wright Express Corporation

Wright Express Corporation (WXS) has surprised on estimates 3 out of the last 4 quarters by an average of 28.83%. The company has an industry beating 1-year return on equity (ROE) of 21.2%.

Company Description

Wright Express provides payment processing and information management services to the U.S. commercial and government vehicle fleet industry. Its charge cards are used by commercial and government fleets to purchase fuel and maintenance services for about 4.6 million vehicles.

Its services include a MasterCard-branded corporate card, TelaPoint, which provides supply chain software for petroleum distributors and retailers, and Pacific Pride, an independent fuel distributor franchisee network.

Wright Express Surprised by 14.29% in the Third Quarter

On Oct 28, Wright Express reported its third quarter results and blew by the Zacks Consensus Estimate by 8 cents per share. Earnings per share were 64 cents compared to the consensus of 56 cents.

Revenues, however, fell 20% to $86.6 million from $108.5 million even though the average number of vehicles serviced rose 3% from the year ago period. Total MasterCard purchase volume also grew by 31% to $876 million from $670 million in the third quarter of 2008.

The total number of fuel transactions was one weaker segment, falling 7%. Payment processing transactions also slid 4%.

New business made up for weakness from the company's current customers, most of whom are still being effected by the recession. The current trends tracked by Wright Express show that the weakness among current customers could continue for the near future.

2009 Guidance Raised

The company was optimistic about the fourth quarter and raised guidance for the full year. Fourth quarter earnings are expected to be between 50 and 55 cents.

For the full year, earnings per share are forecast in the range of $2.12 to $2.17 up sharply from the July guidance of $1.94 to $2.04.

Zacks Consensus Estimates Rise

Give the company's third quarter results and guidance, analysts revised estimates higher. The fourth quarter Zacks Consensus jumped 5 cents to 54 cents in the last 60 days. This is at the higher end of the company's guidance range.

Full year Zacks Consensus Estimates rose 2 cents to $2.14 per share in the last month with 2 out of 7 covering analysts raising during that time period.

Value Fundamentals

Wright Express is a Zacks #1 Rank (strong buy) stock. It is trading with a forward P/E of 13.4 and a price-to-book of 2.55. The company has an amazing average 5-year return on equity (ROE) of 45.44%.

Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.

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Related terms: book, commercial, corporate, earnings, equity, government, investment opinion, knowledge management, petroleum, software