Euronet cuts Q4 adjusted EPS to 98c-$1.00 from $1.07 amid India cash crisis
Euronet Worldwide updated its Q4 earnings estimates following cash supply shortages in India together with continued strengthening of the U.S. dollar. The company stated, "Initial comments from the Indian government indicated that the demonetization of the Rs 500 and Rs 1000 banknotes would result in a temporary cash supply shortage of a few days. However, based on recent communications from the Indian authorities, together with the company's experience through the end of November, the company now believes that access to cash will be limited for a longer period than originally anticipated. Consequently, the cash supply shortage will adversely impact Euronet's Q4 revenue earned from ATM cash withdrawals on the more than 12,000 ATMs Euronet owns or operates as well as revenue earned from money transfer remittance payout in India." In addition to the impact of the Indian demonetization, certain foreign currencies have "weakened substantially" since the company gave guidance in October. The company now expects that these two items will adversely impact Q4 adjusted earnings per share by approximately 7c-9c, resulting in updated guidance of 98c-$1.00 adjusted earnings per share. The company previously forecast EPS of about $1.07. Consensus is $1.07. Based on the Indian authorities' representations to resupply banknotes, the company currently expects the impact from the cash shortage in India to be short-term and that business in India will return to normal by the beginning of 2017.