TNS Inc.

Company Description

TNS Inc provides data communications services to processors of credit card and other card-based transactions. The company provides a variety of networking and data communications services to banks, retailers, communications companies, and financial markets. TNS's has offices around the world and market share in 28 countries.

A 71% Surprise

On May 5 TNS reported earnings per share of 29 cents for the first quarter. The figure shocked analysts, who on average were expecting just 17 cents. This was the company's fifth consecutive surprise.

Revenues were actually down for the quarter, but the company continued to release bullish forecasts.

Surging Revenue

TNS is projecting 38% increase in revenue, using the median of the estimated range. 2008 revenue was $344 million with the forecast in 2009 calling for $475 million.

The company expects earnings per share to rise from $1.60 in 2008 to between $1.69 and $1.84. This would be year-over-year growth of between 5.6% and 15.0%.

Continued Expansion

TNS completed the acquisition of Communications Services Group on May 4 for $226 million in cash. The deal was financed through a term loan facility.

As of now TNS is the leading provider of intelligent database services to the telecom industry and expands into other previously untapped markets.

In addition, TNS has also expanded its footprint with deals in Asia, Latin America, and Europe through smaller deals this year.

Estimates Surge

Following the latest report, the consensus estimates for 2009 and 2010 have dramatically increased. Forecasts for this year are now averaging $1.45, up from $1.03. Next year the consensus is $1.72, up from $1.21.

The Chart

Shares of TNS have been stuck in a trading range for the past few months. However there should some upward pressure given the magnitude of the recent revisions. Take a look at the chart below.