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Global Payments (GPN) Q3 Earnings & Revenues Top, View Up

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Global Payments Inc. GPN came up with third-quarter 2018 adjusted earnings of $1.44 per share, beating the Zacks Consensus Estimate of $1.40 by 2.9% and improving 25% year over year.

Global Payments Inc. Price, Consensus and EPS Surprise

Global Payments Inc. Price, Consensus and EPS Surprise | Global Payments Inc. Quote

The quarter benefited from a strong momentum in integrated and vertical markets plus ecommerce and omnichannel businesses, which delivered double digit growth in the third quarter.

Behind the Headlines

Adjusted net revenues plus network fees were $1,025 million, up 12% year over year. The top line marginally surpassed the Zacks Consensus Estimate by 0.1%.

Total operating expense of $634.5 million decreased 26.7% year over year, led by a lower cost of services as well as a decline in selling, general and administrative expenses.

Adjusted operating margin expanded 120 basis points to 33%.

Growth Across Segments

North America: Adjusted net revenues plus network fees of $755.8 million increased 13.1% year over year. Operating income of $259.1 million was up 19.5% year over year.

Europe: Adjusted net revenues plus network fees of $193.6 million grew 9.5% year over year. Operating income of $92.2 million increased 10.9% year over year.

Asia-Pacific: Adjusted net revenues plus network fees of $75.4 million rose 9.6% year over year. Operating income of $25.4 million grew 14.6% year over year.

Strong Financial and Balance Sheet Position

Total cash and cash equivalents as of Sep 30, 2018 were $990.6 million, down by 25.8% from $1.3 billion as of Dec 31, 2017.

Long-term debt as of Sep 30, 2018 was $4.7 billion, up 3.2% from $4.6 billion at 2017 end.

Net cash provided by operating activities for the first nine months was $661 million, up 83.6% year over year.

The board of directors approved a quarterly dividend of 1 cent per share, payable Dec 28, 2018 to shareholders of record as of Dec 14, 2018.

2018 Guidance Raised

Given a solid third-quarter performance, the company lifted its 2018 outlook.

Adjusted earnings are now expected in the range of $5.12-$5.22, up from the earlier guidance of $5.05-$5.20 per share. The bottom line translates into 28-30% growth over the level in 2017.

Adjusted net revenues are still estimated between $3.96 billion and $3.98 billion, up from the previous prediction of $3.9-$3.975 billion. The bottom line reflects a 15% rise over the level in 2017.

Adjusted operating margin for 2018 is still projected to grow 120 basis points.

Zacks Rank and Performances of Other Industry Players

Global Payments carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other Financial Transaction Services providers, Total System Services, Inc. TSS, Visa Inc. V and Alliance Data Systems Corp. ADS beat the respective Zacks Consensus Estimate.

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