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What's in Store for Global Payments (GPN) Earnings in Q4?

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Global Payments Inc. GPN is slated to report fourth-quarter 2020 results on Feb 8, before market open.

In the last reported quarter, the company’s earnings of $1.71 per share beat the Zacks Consensus Estimate by 3.64%. However, the bottom line was down 13% year over year.

Factors Likely to Impact Q4 Results

Consolidated revenues for the to-be-reported quarter are likely to have gained from additional revenues from the acquired operations of Total System, partially offset by the unfavorable effects of COVID-19.

In the Merchant Solutions segment, the company is expected to have seen higher revenues, driven by a pick-up in consumer spending and restarting of the company’s merchant customer businesses in North America, Europe and the Asia Pacific. The company’s proprietary software portfolio AdvancedMD might have witnessed record bookings in the to-be-reported quarter.

In the Issuer Solution segment, transaction volumes are likely to have seen a recovery while traditional accounts on file are expected to have increased. However, the commercial card business is likely to have been persistently weak due to limited corporate travel.

The shift to cashless solutions benefited the company’s Business and Consumer portfolio with customers remaining active longer and utilizing more of its products, a trend that most likely continued in the to-be-reported quarter as well.

The company implemented cost-saving actions, such as reductions in employee compensation costs and discretionary spending to help mitigate the negative impact of COVID-19 on its finances. Further, these strategic measures are likely to have reduced its operating expenses.

Global Payments resumed its share buyback activity, which was suspended in the second and the third quarter of 2020 in the face of the pandemic to protect its financial flexibility. Thus, the decline in the amount of shares outstanding on account of repurchases is likely to have aided the bottom line.

Q4 Earnings and Revenue Estimates

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.78, indicating a 9.88% increase from the year-ago quarter’s reported figure. The consensus mark for revenues stands at $1.77 billion, suggesting a 1.9% decline from the year-earlier quarter’s reported number.

Earnings Surprise History

The company’s bottom line surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.1%.

Global Payments Inc. Price and EPS Surprise

Global Payments Inc. Price and EPS Surprise
Global Payments Inc. Price and EPS Surprise

Global Payments Inc. price-eps-surprise | Global Payments Inc. Quote

What Our Quantitative Model Predicts

Our proven model does not predict an earnings beat for Global Payments this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But this is not the case here.

Earnings ESP: Global Payments has an Earnings ESP of -1.34%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

Zacks Rank: Global Payments carries a Zacks Rank #3, currently.

Stocks to Consider

Some stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Groupon, Inc. GRPN has an Earnings ESP of +230.91% and a Zacks Rank of 3, currently.

Moody’s Corporation MCO has an Earnings ESP of +2.74% and is Zacks #3 Ranked, currently. You can see the complete list of today’s Zacks #1 Rank stocks here

Equifax, Inc. EFX has an Earnings ESP of +1.44% and is a #3 Ranked player at present.

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The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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Equifax, Inc. (EFX) : Free Stock Analysis Report

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Global Payments Inc. (GPN) : Free Stock Analysis Report

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