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Will Total System (TSS) Earnings Gain From Higher Revenues?
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Total System Services, Inc.’s is scheduled to announce first-quarter 2018 results on Apr 24, 2018 after the closing bell. Its quarterly revenues and earnings are expected to improve year over year.
The company is expected to benefit from a healthy sales pipeline, sharp focus on expense control and a robust roster of issuing clients with long-term agreements.
Last quarter, Total System’s earnings surpassed estimates by 5.1% led by strong contribution from each of its operating segments.
Earnings Surprise History
The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, with an average positive surprise of 6.63%. This is depicted in the chart below:
Total System Services, Inc. Price and EPS Surprise
Our proven model indicates that chances of Total System beating the Zacks Consensus Estimate is high as it has the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for Total System is +0.51%.
Zacks Rank: Total System has a Zacks Rank #3, which increases the predictive power of ESP.
Factors to Influence Q1 Results
The company’s NetSpend segment should deliver revenue growth from an increase in gross dollar volume and higher debit active cards. Contract extensions for several significant partnership agreements signed in the fourth quarter should drive the top line. Some of these contracts were a one-year extension with Intuit for QuickBooks which offers NetSpend accounts to users of their accounting software, a two-year extension with Liberty Tax as well as a three and four-year, respective, contract extension with Advance America and Check `n Go. The Zacks Consensus Estimate for total revenue from the segment is $202 million, up 2.5% year over year.
The company’s Issuer Solutions segment should see top-line growth from an increase in Total Accounts on File (AoF), led by new business and internal growth. The Zacks Consensus Estimate for total AoF is 812 million, reflecting an increase of 6.6% year over year. Focus on new product initiatives, technology modernization and integration activities will further aid revenues in the segment.
On Jan 11, 2018, the company completed its acquisition of Cayan Holdings LLC. which became part of the Merchant Solutions segment. This deal will allow Total System to serve about 730,000 merchant sites with an annual processing volume of more than $138 billion, and will be only slightly accretive to the segment’s first-quarter earnings. This segment should report revenue growth from the acquisition of TransFirst (made in April 2016). The Zacks Consensus Estimate for revenues from this segment stands at $338 million, which translates into year-over-year growth of 29.5%.
The company should incur a higher interest cost in the first quarter on account of debt taken to close the Cayan acquisition. Investments made to enhance the company’s infrastructure, longer-term product offerings and technological capabilities, should push up expenses and weigh on margins to some extent.
Nevertheless, a decline in tax rate to the 21% to 23% range, down from the 32% to 33%, as a result of the Tax Cuts and Jobs Act will aid the company’s margins.
Other Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Visa Inc. (V - Free Report) has an Earnings ESP of +1.92% and a Zacks Rank #3. The company is expected to report fiscal seconf-quarter earnings results on Apr 25.
Worldpay, Inc. has an Earnings ESP of +0.78% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on Apr 25.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Will Total System (TSS) Earnings Gain From Higher Revenues?
Total System Services, Inc.’s is scheduled to announce first-quarter 2018 results on Apr 24, 2018 after the closing bell. Its quarterly revenues and earnings are expected to improve year over year.
The company is expected to benefit from a healthy sales pipeline, sharp focus on expense control and a robust roster of issuing clients with long-term agreements.
Last quarter, Total System’s earnings surpassed estimates by 5.1% led by strong contribution from each of its operating segments.
Earnings Surprise History
The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, with an average positive surprise of 6.63%. This is depicted in the chart below:
Total System Services, Inc. Price and EPS Surprise
Total System Services, Inc. Price and EPS Surprise | Total System Services, Inc. Quote
Why a Likely Positive Surprise?
Our proven model indicates that chances of Total System beating the Zacks Consensus Estimate is high as it has the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: The Earnings ESP for Total System is +0.51%.
Zacks Rank: Total System has a Zacks Rank #3, which increases the predictive power of ESP.
Factors to Influence Q1 Results
The company’s NetSpend segment should deliver revenue growth from an increase in gross dollar volume and higher debit active cards. Contract extensions for several significant partnership agreements signed in the fourth quarter should drive the top line. Some of these contracts were a one-year extension with Intuit for QuickBooks which offers NetSpend accounts to users of their accounting software, a two-year extension with Liberty Tax as well as a three and four-year, respective, contract extension with Advance America and Check `n Go. The Zacks Consensus Estimate for total revenue from the segment is $202 million, up 2.5% year over year.
The company’s Issuer Solutions segment should see top-line growth from an increase in Total Accounts on File (AoF), led by new business and internal growth. The Zacks Consensus Estimate for total AoF is 812 million, reflecting an increase of 6.6% year over year. Focus on new product initiatives, technology modernization and integration activities will further aid revenues in the segment.
On Jan 11, 2018, the company completed its acquisition of Cayan Holdings LLC. which became part of the Merchant Solutions segment. This deal will allow Total System to serve about 730,000 merchant sites with an annual processing volume of more than $138 billion, and will be only slightly accretive to the segment’s first-quarter earnings. This segment should report revenue growth from the acquisition of TransFirst (made in April 2016). The Zacks Consensus Estimate for revenues from this segment stands at $338 million, which translates into year-over-year growth of 29.5%.
The company should incur a higher interest cost in the first quarter on account of debt taken to close the Cayan acquisition. Investments made to enhance the company’s infrastructure, longer-term product offerings and technological capabilities, should push up expenses and weigh on margins to some extent.
Nevertheless, a decline in tax rate to the 21% to 23% range, down from the 32% to 33%, as a result of the Tax Cuts and Jobs Act will aid the company’s margins.
Other Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Mastercard Incorporated (MA - Free Report) , is expected to report first-quarter 2018 earnings results on May 2. The company has an Earnings ESP of +1.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here..
Visa Inc. (V - Free Report) has an Earnings ESP of +1.92% and a Zacks Rank #3. The company is expected to report fiscal seconf-quarter earnings results on Apr 25.
Worldpay, Inc. has an Earnings ESP of +0.78% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on Apr 25.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>