PORTLAND, Maine — Wright Express Corp. reported a 25 percent drop in net income for the second quarter of the year on Wednesday, and warned that lower fuel prices will hurt revenues and profits for the rest of 2012.
The South Portland-based company, which processes fuel payments for fleet vehicles, reported revenues of $153 million and net income of $30 million, or 78 cents a share, for the three-month period ending June 30. Revenues increased 8 percent from $141 million in the same period last year, while net income fell from $40 million in the second quarter in 2011. Adjusted income was $39 million, or $1 a share, up 10 percent from last year.
The company revised its revenue and income estimates downward for the rest of the year because fuel prices are expected to be lower than what were being projected at the start of the year, said CEO and President Michael Dubyak. The sluggish economy and the strengthening of the dollar aren’t helping, he said.
Wright Express’ main line of business provides payment processing and information management services to commercial and government vehicle fleets. Lower fuel prices hurt the company because it earns a percentage on fuel purchases made by customers.
“It’s impacting us, not in a major way because we’re still growing our other pieces of business, but it’s impacting the fleet part of our business,” Dubyak said.
Dubyak said he expects the company’s other business lines providing travel and health care payment processing services to grow 25-35 percent the rest of the year. The company is confident in its long-term prospects and its fundamentals remain strong, he said.
Wright Express has enjoyed impressive growth in the past few years.
Revenues have grown by 75 percent in the past three years. The company’s stock price has risen to above $65 a share since bottoming out below $9 a share when stock markets plummeted in late 2008.
In reporting earnings Wednesday, the company said its adjusted net income, using accounting principles not generally accepted, rose 10 percent to $39 million last quarter compared to last year. That figure is adjusted for unrealized gains on fuel price derivatives, amortization of certain assets and tax impacts.
The company has acquired a number of other companies and expanded into new lines of business in the past few years.
In June, it announced plans to expand into health care payment processing.