Global Payments Inc. (GPN - Free Report) came up with first-quarter 2019 adjusted earnings of $1.34 per share, beating the Zacks Consensus Estimate by 3.1% and improving 18.6% year over year.
The reported quarter benefited from the company’s higher revenues, partly offset by increase in expenses.
Behind the Headlines
Adjusted net revenues plus network fees were $1.04 billion, up 13% year over year. The top line also marginally surpassed the Zacks Consensus Estimate by 0.8%, mainly driven by segmental performances.
Total operating expense of $683.5 million increased 7% year over year, led by higher cost of services, partly offset by lower selling, general and administration expenses.
Adjusted operating margin expanded 110 basis points to 31.5%.
Global Payments Inc. Price, Consensus and EPS Surprise
Growth Across Segments
North America: Adjusted net revenues plus network fees of $786.4 million increased 16.2% year over year. Operating income of $262 million was up 23% year over year.
Europe: Adjusted net revenues plus network fees of $174 million grew 1.8% year over year. Operating income of $80 million rose 3% year over year.
Asia-Pacific: Adjusted net revenues plus network fees of $82.6 million climbed 7.8% year over year. Operating income of $30 million improved 15.8% year over year.
Dividend Update
Global Payments’ board of directors has approved a dividend of 1 cent per share, payable Jun 28, 2019 to shareholders of record as of Jun 14, 2019.
Balance Sheet Position
Total cash and cash equivalents as of Mar 31, 2019 were $1.3 billion, up 5.5% from Dec 31, 2018 level.
Long-term debt as of Mar 30, 2019 was $5.2 billion, up 3.1% from the level at 2018 end.
Net cash provided by operating activities for the first quarter of 2019 was $229.7 million, up 19% year over year.
2019 Outlook
For 2019, the company expects adjusted net revenues plus network fees in the band of $4.43-$4.49 billion. Adjusted EPS is projected in the range of $5.95 –$6.12, up from the previous estimate of $5.90-$6.10.
Zacks Rank and Performances of Other Industry Players
Global Payments carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Stocks
Alliance Data Systems Corp.’s operating earnings of $3.55 per share for the first quarter of 2019 missed the Zacks Consensus Estimate of $3.76. The bottom line declined 13.4% year over year.
Visa Inc. (V - Free Report) reported second-quarter fiscal 2019 earnings of $1.31 per share, beating the Zacks Consensus Estimate by 5.65%. Also, the bottom line improved 18% year over year. The results were driven by growth in payments volume, cross-border volume and processed transactions.
Total System Services, Inc.’s first-quarter 2019 earnings per share of $1.15 surpassed the Zacks Consensus Estimate by 2.9% and also jumped nearly 4.5% year over year. Strong performance by all three segments — Issuer Solutions, Merchant Solutions and Consumer Solutions — contributed to the favorable results.
Zacks' Top 10 Stocks for 2019
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Global Payments Inc. (GPN - Free Report) came up with first-quarter 2019 adjusted earnings of $1.34 per share, beating the Zacks Consensus Estimate by 3.1% and improving 18.6% year over year.
The reported quarter benefited from the company’s higher revenues, partly offset by increase in expenses.
Behind the Headlines
Adjusted net revenues plus network fees were $1.04 billion, up 13% year over year. The top line also marginally surpassed the Zacks Consensus Estimate by 0.8%, mainly driven by segmental performances.
Total operating expense of $683.5 million increased 7% year over year, led by higher cost of services, partly offset by lower selling, general and administration expenses.
Adjusted operating margin expanded 110 basis points to 31.5%.
Global Payments Inc. Price, Consensus and EPS Surprise
Growth Across Segments
North America: Adjusted net revenues plus network fees of $786.4 million increased 16.2% year over year. Operating income of $262 million was up 23% year over year.
Europe: Adjusted net revenues plus network fees of $174 million grew 1.8% year over year. Operating income of $80 million rose 3% year over year.
Asia-Pacific: Adjusted net revenues plus network fees of $82.6 million climbed 7.8% year over year. Operating income of $30 million improved 15.8% year over year.
Dividend Update
Global Payments’ board of directors has approved a dividend of 1 cent per share, payable Jun 28, 2019 to shareholders of record as of Jun 14, 2019.
Balance Sheet Position
Total cash and cash equivalents as of Mar 31, 2019 were $1.3 billion, up 5.5% from Dec 31, 2018 level.
Long-term debt as of Mar 30, 2019 was $5.2 billion, up 3.1% from the level at 2018 end.
Net cash provided by operating activities for the first quarter of 2019 was $229.7 million, up 19% year over year.
2019 Outlook
For 2019, the company expects adjusted net revenues plus network fees in the band of $4.43-$4.49 billion. Adjusted EPS is projected in the range of $5.95 –$6.12, up from the previous estimate of $5.90-$6.10.
Zacks Rank and Performances of Other Industry Players
Global Payments carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Stocks
Alliance Data Systems Corp.’s operating earnings of $3.55 per share for the first quarter of 2019 missed the Zacks Consensus Estimate of $3.76. The bottom line declined 13.4% year over year.
Visa Inc. (V - Free Report) reported second-quarter fiscal 2019 earnings of $1.31 per share, beating the Zacks Consensus Estimate by 5.65%. Also, the bottom line improved 18% year over year. The results were driven by growth in payments volume, cross-border volume and processed transactions.
Total System Services, Inc.’s first-quarter 2019 earnings per share of $1.15 surpassed the Zacks Consensus Estimate by 2.9% and also jumped nearly 4.5% year over year. Strong performance by all three segments — Issuer Solutions, Merchant Solutions and Consumer Solutions — contributed to the favorable results.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>
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 >>
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