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Global Payments (GPN) Beats on Q2 Earnings, Ups EPS Guidance
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Global Payments Inc. (GPN - Free Report) came up with second-quarter 2018 adjusted earnings of $1.29 per share, beating the Zacks Consensus Estimate of $1.22 by 5.7% and surging nearly 37% year over year.
The above upside was mainly driven by an ongoing business momentum as well as the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.
Adjusted net revenues plus network fees were $982.5 million, up 18% year over year. The top line also surpassed the Zacks Consensus Estimate by 1.5%.
Total operating expense of $642.4 million decreased 22.7% year over year, led by a whopping 78% slump in cost of service.
Adjusted operating margin expanded 160 basis points to 31.4%.
Growth Across Segments
North America: Adjusted net revenues plus network fees of $718.5 million increased 18.3% year over year. Operating income of $232.8 million was up 25.8% year over year.
Europe: Adjusted net revenues plus network fees of $190 million grew 19.5% year over year. Operating income of $90 million increased 24.7% year over year.
Asia-Pacific: Adjusted net revenues plus network fees of $73.7 million rose 13.8% year over year. Operating income of $23 million grew 18.7% year over year.
Strong Financial and Balance Sheet Position
Total cash and cash equivalents as of Jun 30, 2018 were $1 billion, down by 17.7% from $1.3 billion as of Dec 31, 2017. This downtrend is mainly due to lower settlement processing assets, current assets and goodwill.
Long-term debt as of Jun 30, 2018 was $4.2 billion, down from $4.5 billion at 2017 end.
The company also approved a quarterly dividend of 1 cent per share, payable Sep 28, 2018 to shareholders of record as of Sep 14, 2018.
2018 Guidance
Given a solid second-quarter performance, the company raised its 2018 outlook.
Adjusted earnings are now expected in the range of $5.05-$5.20, tweaked from $5-$5.20 per share, guided earlier. The bottom line translates into 26-30% growth over the level in 2017.
However, the company retains its view for the following items:
Adjusted net revenues are still estimated between $3.9 billion and $3.975 billion. The bottom line reflects a 13-15% rise over the level in 2017.
Adjusted operating margin for 2018 is projected to grow 120 basis points.
The outlook for 2018 does not include any impact from the acquisition of AdvancedMD.
Among other Financial Transaction Services providers, Visa Inc. (V - Free Report) , Total System Services, Inc. and Alliance Data Systems Corp. beat the respective Zacks Consensus Estimate.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Global Payments (GPN) Beats on Q2 Earnings, Ups EPS Guidance
Global Payments Inc. (GPN - Free Report) came up with second-quarter 2018 adjusted earnings of $1.29 per share, beating the Zacks Consensus Estimate of $1.22 by 5.7% and surging nearly 37% year over year.
Global Payments Inc. Price and EPS Surprise
Global Payments Inc. Price and EPS Surprise | Global Payments Inc. Quote
The above upside was mainly driven by an ongoing business momentum as well as the adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers.
Adjusted net revenues plus network fees were $982.5 million, up 18% year over year. The top line also surpassed the Zacks Consensus Estimate by 1.5%.
Total operating expense of $642.4 million decreased 22.7% year over year, led by a whopping 78% slump in cost of service.
Adjusted operating margin expanded 160 basis points to 31.4%.
Growth Across Segments
North America: Adjusted net revenues plus network fees of $718.5 million increased 18.3% year over year. Operating income of $232.8 million was up 25.8% year over year.
Europe: Adjusted net revenues plus network fees of $190 million grew 19.5% year over year. Operating income of $90 million increased 24.7% year over year.
Asia-Pacific: Adjusted net revenues plus network fees of $73.7 million rose 13.8% year over year. Operating income of $23 million grew 18.7% year over year.
Strong Financial and Balance Sheet Position
Total cash and cash equivalents as of Jun 30, 2018 were $1 billion, down by 17.7% from $1.3 billion as of Dec 31, 2017. This downtrend is mainly due to lower settlement processing assets, current assets and goodwill.
Long-term debt as of Jun 30, 2018 was $4.2 billion, down from $4.5 billion at 2017 end.
The company also approved a quarterly dividend of 1 cent per share, payable Sep 28, 2018 to shareholders of record as of Sep 14, 2018.
2018 Guidance
Given a solid second-quarter performance, the company raised its 2018 outlook.
Adjusted earnings are now expected in the range of $5.05-$5.20, tweaked from $5-$5.20 per share, guided earlier. The bottom line translates into 26-30% growth over the level in 2017.
However, the company retains its view for the following items:
Adjusted net revenues are still estimated between $3.9 billion and $3.975 billion. The bottom line reflects a 13-15% rise over the level in 2017.
Adjusted operating margin for 2018 is projected to grow 120 basis points.
The outlook for 2018 does not include any impact from the acquisition of AdvancedMD.
Zacks Rank and Other Performances
Global Payments carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other Financial Transaction Services providers, Visa Inc. (V - Free Report) , Total System Services, Inc. and Alliance Data Systems Corp. beat the respective Zacks Consensus Estimate.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>