We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alliance Data (ADS) Q3 Earnings Meet, '18 Revenue View Cut
Read MoreHide Full Article
Alliance Data Systems Corporation’s operating earnings of $6.26 per share in the third quarter of 2018 were in line with the Zacks Consensus Estimate. The bottom line improved 17% year over year on strength in Card Services and LoyaltyOne segments.
Alliance Data Systems Corporation Price, Consensus and EPS Surprise
Alliance Data generated total revenues of $1.9 billion, up 2% year over year. Pro forma revenues, which adjust for the change to net revenue presentation for AIR MILES effective Jan 1, 2018, improved 5% year over year to $2.02 billion. The top line marginally missed the Zacks Consensus Estimate of $2.06 billion.
Operating expenses dropped 0.6% year over year to $1.4 billion primarily because of higher provision for loan loss and depreciation and amortization. Operating income increased nearly 9% year over year to $522 million.
Adjusted EBITDA (net of funding costs) rose 2% year over year to $563 million.
Segment Update
LoyaltyOne: Revenues totaled $329 million, improving 8% year over year. Adjusted EBITDA grew 4% to $63 million. AIR MILES’ reward miles issued increased 3% while AIR MILES’ reward miles redeemed ticked up 1%.
Epsilon: Revenues totaled $538 million in the quarter under review, down 4% year over year because of lower margin pass-through agency business and site-based display product offerings. Adjusted EBITDA of $125 million was in line with the year-ago quarter.
Card Services: Revenues came in at $1.2 billion, up 10% year over year. Adjusted EBITDA was $414 million, up 4% year over year.
Financial Update
As of Sep 30, 2018, cash and cash equivalents were $3.6 billion, down 14% from Dec 31, 2017-level of $4.2 billion.
At the end of the third quarter, debt level was down 4.5% to $5.8 billion from 2017-end.
Cash from operations improved 15.2% year over year to $2 billion in the first three quarters while capital expenditure at Alliance Data declined 15.5% year over year to $149.3 million in the same period.
2018 Guidance
The company continues to expect core EPS between $22.50 and $23.00, up 16% to 19% over the 2017 tally.
Net revenues are expected at $7.9 billion while pro-forma revenues are estimated to be $8.2 billion. These estimates were lowered from the earlier guidance to account for continued weakness in certain Epsilon product offerings and the initial impact of strategic initiatives.
Some players from the same space poised to beat on earnings per the proven Zacks model are:
Cardtronics plc is set to report third-quarter earnings on Nov 1. The company has an Earnings ESP of +2.79% and a Zacks Rank of 1.
WEX Inc. (WEX - Free Report) is set to report third-quarter earnings on Oct 31. This #2 (Buy) Ranked stock has an Earnings ESP of +0.49%.
Visa, Inc. (V - Free Report) has an Earnings ESP of +0.43%. This #2 Ranked company is set to report fiscal fourth-quarter earnings on Oct 31.
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.
Image: Bigstock
Alliance Data (ADS) Q3 Earnings Meet, '18 Revenue View Cut
Alliance Data Systems Corporation’s operating earnings of $6.26 per share in the third quarter of 2018 were in line with the Zacks Consensus Estimate. The bottom line improved 17% year over year on strength in Card Services and LoyaltyOne segments.
Alliance Data Systems Corporation Price, Consensus and EPS Surprise
Alliance Data Systems Corporation Price, Consensus and EPS Surprise | Alliance Data Systems Corporation Quote
Behind the Headlines
Alliance Data generated total revenues of $1.9 billion, up 2% year over year. Pro forma revenues, which adjust for the change to net revenue presentation for AIR MILES effective Jan 1, 2018, improved 5% year over year to $2.02 billion. The top line marginally missed the Zacks Consensus Estimate of $2.06 billion.
Operating expenses dropped 0.6% year over year to $1.4 billion primarily because of higher provision for loan loss and depreciation and amortization. Operating income increased nearly 9% year over year to $522 million.
Adjusted EBITDA (net of funding costs) rose 2% year over year to $563 million.
Segment Update
LoyaltyOne: Revenues totaled $329 million, improving 8% year over year. Adjusted EBITDA grew 4% to $63 million. AIR MILES’ reward miles issued increased 3% while AIR MILES’ reward miles redeemed ticked up 1%.
Epsilon: Revenues totaled $538 million in the quarter under review, down 4% year over year because of lower margin pass-through agency business and site-based display product offerings. Adjusted EBITDA of $125 million was in line with the year-ago quarter.
Card Services: Revenues came in at $1.2 billion, up 10% year over year. Adjusted EBITDA was $414 million, up 4% year over year.
Financial Update
As of Sep 30, 2018, cash and cash equivalents were $3.6 billion, down 14% from Dec 31, 2017-level of $4.2 billion.
At the end of the third quarter, debt level was down 4.5% to $5.8 billion from 2017-end.
Cash from operations improved 15.2% year over year to $2 billion in the first three quarters while capital expenditure at Alliance Data declined 15.5% year over year to $149.3 million in the same period.
2018 Guidance
The company continues to expect core EPS between $22.50 and $23.00, up 16% to 19% over the 2017 tally.
Net revenues are expected at $7.9 billion while pro-forma revenues are estimated to be $8.2 billion. These estimates were lowered from the earlier guidance to account for continued weakness in certain Epsilon product offerings and the initial impact of strategic initiatives.
Zacks Rank
Alliance Data carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Warrant a Look
Some players from the same space poised to beat on earnings per the proven Zacks model are:
Cardtronics plc is set to report third-quarter earnings on Nov 1. The company has an Earnings ESP of +2.79% and a Zacks Rank of 1.
WEX Inc. (WEX - Free Report) is set to report third-quarter earnings on Oct 31. This #2 (Buy) Ranked stock has an Earnings ESP of +0.49%.
Visa, Inc. (V - Free Report) has an Earnings ESP of +0.43%. This #2 Ranked company is set to report fiscal fourth-quarter earnings on Oct 31.
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 >>