Fidelity National shares jump on Q2 profit, raised 2008 outlook
Aug 6 (Reuters) - Shares of electronic-payment processor Fidelity National Information Services Inc (FIS.N: Quotazione) rose 20 percent on Wednesday, a day after it posted a better-than-expected quarterly earnings, helped by sales at a financial transactions processor it bought last year, and raised its 2008 earnings outlook.
Even though Fidelity National is not immune to the downturn in the financial services, the company was not being hurt significantly, analysts said.
"Our main concern was FIS's large exposure to financial institutions with the potential that many banks may look to reduce or delay its product base in order to conserve capital, Fox-Pitt analyst Roger Smith said.
"While FIS may experience the cyclical affect from a downturn in the financial services industry, we are becoming more comfortable that a slowdown in the economy should not severely impact sales."
Smith retained his "overweight" rating and price target of $24 on the stock.
But Credit Suisse analyst Bryan Keane halved his price target on the stock to $21. He expects weakness in the enterprise revenue segment due to exposure to check business and a higher percentage of software license sales sold to larger financial institutions.
EFUNDS HELPS Q2
The company earned 37 cents a share for the second quarter.
Consolidated revenue rose 19 percent to $1.3 billion, helped by revenue of $137.2 million from eFunds, which was bought by Fidelity National last September. Continua...