BOSTON (AP) -- Shares of Global Payments Inc. fell Friday on quarterly earnings that missed Wall Street's expectations.
THE SPARK: After markets closed on Thursday, the Atlanta-based processor of credit, debit and gift card payments for merchants and financial institutions reported net income of $61.2 million, or 78 cents per share, for its fiscal third quarter ended Nov. 30. That was up 14 percent from earnings of $53.5 million, or 67 cents per share, in the same quarter a year ago.
Analysts surveyed by FactSet had expected earnings of 80 cents per share, on average, in the latest quarter.
However, its revenue of $530.5 million rose 20 percent and beat the consensus forecast of $524.2 million.
THE ANALYSIS: Janney Capital Markets analyst Thomas McCrohan said in a note to clients that Global Payments' revenue in Asia slipped 0.3 percent, while revenues from Canada rose just 5 percent after posting a double-digit percentage increase in the first quarter.
McCrohan maintained a "Neutral" rating for shares of Global Payments, saying prospects for a sustained increased in its profit margin "remain fleeting." He cited pressure on the company's core U.S. business, shaky consumer confidence, and the need for Global Payments to continue investing to consolidate the company's payment processing operations across the globe.
McCrohan also said that Global Payments missed earnings expectations despite a benefit of 2 cents per share from the Durbin Amendment, which amended the 2010 financial regulatory overhaul, the Wall Street Reform and Consumer Financial Protection Act. The amendment caps the fees that merchants pay financial institutions when a customer swipes a debit card. Because Global Payments allows businesses to accept credit and debit card-based payments at the counter, the company could be a big winner from the changes.
SHARE ACTION: Shares of Global Payments fell $2, or 4.2 percent, to $45.99 in morning trading. The stock has traded in a 52-week range of $38.26 to $53.67.