Portland-based Wex Inc. reported revenue growth for the first quarter that beat analyst expectations, increasing by 8 percent from a year earlier to $381.9 million.
However, the payment-processing technology firm’s quarterly net income decreased by $35.8 million from a year earlier to $16.1 million, or 37 cents per share. Company President and CEO Melissa Smith attributed the decrease to nonrecurring costs related to the recent acquisition of two major accounts: Shell Oil Co. and Chevron Corp.
“We had to hire a bunch of people and train them, and do a lot of performance enhancements within that platform to get ready for all the incremental volume and reissue (payment) cards,” Smith said in an interview Thursday. “So there’s just a huge body of work that’s happened, and it has an unusual impact in the year because of the sheer size of these two portfolios coming on at once.”
Smith said the financial benefits of taking on the two massive accounts will start to be more apparent in the second quarter and will really ramp up in the latter half of the year.
Wex provides fuel payment cards and payment-processing services to companies and government organizations that operate fleets of trucks and other vehicles. It also provides payment-processing services to online travel-booking services and health care providers.
The company’s reported first-quarter revenue of $381.9 million reflects a 7.9 percent increase from $354 million in the first quarter of 2018. The gains were offset slightly by a decline in fuel prices, which cost the company about $4.5 million in revenue, it said.
Still, Wex revenue beat analyst expectations by $2.3 million, according to the investor website Seeking Alpha.
The company’s quarterly net income, excluding one-time charges and gains, was $74.8 million, or $1.72 per share, down 9 percent per share from $82 million, or $1.89 per share, for the same period of 2018. That figure exceeded analyst expectations by 3 cents per share, Seeking Alpha said.
The company’s latest quarterly report illustrates just how much its business has grown, with the average number of vehicles serviced exceeding 13 million, and the total number of fuel transactions processed reaching 140.5 million. Smith said Wex has come a long way from $50 million a year in revenue when she started working there in 1997.
“These products are used all over the world, and just the size and scale has changed,” she said.
Wex reported another year of strong earnings growth in 2018 with revenue of $1.49 billion, up 19 percent from $1.25 billion in 2017. Its adjusted net income for the year was $360.9 million, or $8.28 per share, up 56 percent per share from $229.3 million, or $5.32 per share, in 2017.
The payment-processing technology firm has about 1,500 employees in Portland and South Portland out of roughly 4,700 worldwide. Wex is relocating about 400 employees to its new downtown headquarters in Portland, which opened in March.
J. Craig Anderson can be contacted at 791-6390 or at: