What to expect from Qiwi (NASDAQ: QIWI) Q3 earnings?

Qiwi plc (NASDAQ: QIWI) is slated to report its third-quarter earnings results on Wednesday before the market opens. The Russian payments giant will be benefited from the adoption of digital payments services, Qiwi wallet, and other applications in the country.

The payment services, consumer financial services, and small & medium enterprises could be the driving factor of the company’s top-line growth. The growth will also be driven by e-commerce and money remittance vertical. However, the financial services industry remained under the pressure of immense competition from different business groups for survival.

Read: Fiverr International Q3 earnings

The payments services business continues to depend on its ability to maintain or increase its average net revenue yield. The yield is likely to vary based on increased competition, pressure from merchants and/or agents, changes in regulation, and acquisitions. This also includes the costs incurred due to the consumers reloading their Qiwi Wallet accounts.

The company’s volumes, revenues and the profitability of its payment services segment will continue to depend to a certain extent on the use of cash as a means of payment and the reach of its kiosks and terminals network. Over time, the prevalence of cash payments is declining as a greater percentage of the population in emerging markets is adopting credit and debit card payments and electronic banking, and the company’s kiosks and terminals network are decreasing.

Analysts expect the company’s earnings to increase by 17.90% to $0.33 per share and revenue will jump by 13.60% to $88.31 million for the third quarter. The company has surprised investors by beating analysts’ expectations in all of the past four quarters. The majority of the analysts recommended a “hold” rating with an average price target of $30.18.

Read: YY Q3 earnings snapshot

For the second quarter, Qiwi posted better-than-expected earnings driven by higher revenues. The top line jumped by 23% helped by a 35% increase in payment services, which includes Qiwi wallet and other applications. Payment service volume also saw a 41% jump compared to last year.

For the full year 2019, the company expects adjusted net revenue growth in the range of 11% to 16% and payment services revenue growth in the range of 23% to 27%. Net profit in the payment services segment is predicted to rise by 25% to 29% over 2018 and adjusted net profit growth guidance is unchanged at 40% to 50%.

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