Total System Services, Inc.’s second-quarter 2018 earnings per share of $1.11 surpassed the Zacks Consensus Estimate by 2.7% and surged 30.5% year over year. Exceptional performances by all three segments have contributed to this favorable result.
Total System Services, Inc. Price and EPS Surprise
Net revenues were $956.5 million, up 13.3% year over year. The top line also beat the Zacks Consensus Estimate by 2.5%.
The company reported adjusted EBITDA of $345 million, up 12.1% from the year-ago quarter.
Issuer Solutions
In the second quarter, net revenues for this segment increased 7.2% year over year to $421 million driven by 13.3% increase in total transaction year over year.
Operating income of $151 million was up 2.9% year over year. Operating margin of 36% contracted 150 basis points (bps) from the year-ago period.
Merchant Solutions
Net revenues rose 24.3% to $346.4 million. It was mainly backed by Cayan's strong performance and the benefit of the low double-digit organic net revenue growth of pre-Cayan business. Dollar sales volume for the segment grew 29.7% year over year to $40.3 billion.
Operating income increased 22.4% to $124.8 million while operating margin declined 60 basis points to 36% from the prior-year quarter.
Consumer Solutions
Net revenues for this segment amounted to $200 million, up 9.4%, driven by 9.6% growth in GDV and solid contribution across all four distribution channels.
Operating income rose 9.1% to $50.2 million while operating margin contracted 10 basis points to 25.1%.
Financial Position
Total assets jumped 18% from Mar 31, 2018 to $7.5 billion as of Jun 30, 2018.
Total shareholders’ equity climbed to $2.5 billion on Jun 30, 2018 from $2.2 billion at the end of March 2018.
Free cash flow for the first six months of 2018 totaled $382.8 million, up 14.1% from the first half of 2017.
2018 Guidance
Driven by strong second-quarter results and favorable expectations for the remaining year, the company has raised its 2018 view. The company expects total revenues on a GAAP basis in the range of $3.9-$4 billion, down 20-18%. On a non-GAAP basis, net revenues are anticipated in the range of $3.7-$3.8 billion, reflecting year-over-year growth of 10-13%.
GAAP EPS will likely be in the $3.02-$3.12 band, down 4-1% from the prior-year quarter. Adjusted EPS is expected between $4.3 and $4.4, reflecting an increase of about 28-31%.
Zacks Rank
Total System Services carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Alliance Data’s second-quarter bottom line beat estimates on the back Card Services and LoyaltyOne segment results.
Green Dot Corporation (GDOT - Free Report) is set to release second-quarter 2018 earnings on Aug 8 and the consensus mark for the same stands at 63 cents per share, representing improvement from a loss of 14.5% from the year-ago period. The stock carries a Zacks Rank #2 (Buy).
WEX Inc. (WEX - Free Report) is slated to release second-quarter 2018 earnings on Aug 2 and the Zacks Consensus Estimate for the same is pegged at $2.03, translating into a year-over-year rise of 61%. The stock has a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Total System Services, Inc.’s second-quarter 2018 earnings per share of $1.11 surpassed the Zacks Consensus Estimate by 2.7% and surged 30.5% year over year. Exceptional performances by all three segments have contributed to this favorable result.
Total System Services, Inc. Price and EPS Surprise
Net revenues were $956.5 million, up 13.3% year over year. The top line also beat the Zacks Consensus Estimate by 2.5%.
The company reported adjusted EBITDA of $345 million, up 12.1% from the year-ago quarter.
Issuer Solutions
In the second quarter, net revenues for this segment increased 7.2% year over year to $421 million driven by 13.3% increase in total transaction year over year.
Operating income of $151 million was up 2.9% year over year. Operating margin of 36% contracted 150 basis points (bps) from the year-ago period.
Merchant Solutions
Net revenues rose 24.3% to $346.4 million. It was mainly backed by Cayan's strong performance and the benefit of the low double-digit organic net revenue growth of pre-Cayan business. Dollar sales volume for the segment grew 29.7% year over year to $40.3 billion.
Operating income increased 22.4% to $124.8 million while operating margin declined 60 basis points to 36% from the prior-year quarter.
Consumer Solutions
Net revenues for this segment amounted to $200 million, up 9.4%, driven by 9.6% growth in GDV and solid contribution across all four distribution channels.
Operating income rose 9.1% to $50.2 million while operating margin contracted 10 basis points to 25.1%.
Financial Position
Total assets jumped 18% from Mar 31, 2018 to $7.5 billion as of Jun 30, 2018.
Total shareholders’ equity climbed to $2.5 billion on Jun 30, 2018 from $2.2 billion at the end of March 2018.
Free cash flow for the first six months of 2018 totaled $382.8 million, up 14.1% from the first half of 2017.
2018 Guidance
Driven by strong second-quarter results and favorable expectations for the remaining year, the company has raised its 2018 view. The company expects total revenues on a GAAP basis in the range of $3.9-$4 billion, down 20-18%. On a non-GAAP basis, net revenues are anticipated in the range of $3.7-$3.8 billion, reflecting year-over-year growth of 10-13%.
GAAP EPS will likely be in the $3.02-$3.12 band, down 4-1% from the prior-year quarter. Adjusted EPS is expected between $4.3 and $4.4, reflecting an increase of about 28-31%.
Zacks Rank
Total System Services carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
Alliance Data’s second-quarter bottom line beat estimates on the back Card Services and LoyaltyOne segment results.
Green Dot Corporation (GDOT - Free Report) is set to release second-quarter 2018 earnings on Aug 8 and the consensus mark for the same stands at 63 cents per share, representing improvement from a loss of 14.5% from the year-ago period. The stock carries a Zacks Rank #2 (Buy).
WEX Inc. (WEX - Free Report) is slated to release second-quarter 2018 earnings on Aug 2 and the Zacks Consensus Estimate for the same is pegged at $2.03, translating into a year-over-year rise of 61%. The stock has a Zacks Rank of 2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on GDOT - FREE
Get the latest research report on WEX - FREE