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Global Payments (GPN) Q3 Earnings & Revenues Top Estimates
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Global Payments Inc. (GPN - Free Report) third-quarter 2020 adjusted earnings of $1.71 per share beat the Zacks Consensus Estimate by 10.3%. Also, the bottom line improved 8.2% year over year.
Adjusted net revenues declined 4% year over year to $1.75 billion. However, the top line surpassed the Zacks Consensus Estimate by 1.4%.
Adjusted operating margin was 41.1%, up 250 basis points (bps) year over year.
The company’s results reflect constant market recovery and cost-control efforts, which have been driving margins. However, the results have been partially offset by softer revenues across most segments barring Business and Consumer Solutions.
Segmental Performances
Merchant Solutions: Adjusted revenues of $1.1 billion at this segment decreased 6.2% year over year. Operating income of $532.3 million fell 5.3% year over year.
Issuer Solutions: Adjusted net revenues of $433.4 million fell 2.5% year over year. Operating income of $187.7 million increased 10.3% year over year.
Business and Consumer Solution: The segment reported adjusted net revenues of $204.1 million, up 7.2% year over year. Operating income was $52.3 million, up 48.3% year over year.
Global Payments Inc. Price, Consensus and EPS Surprise
Total cash and cash equivalents were $2.2 billion, which surged 32.3% from the level as of Dec 31, 2019.
Long-term debt was $8.4 billion, down 7.2% from the level at 2019 end.
Net cash provided by operating activities for the first nine months of 2020 was $1.5 billion, up 14.5% from the year-ago comparable period.
Share Repurchase and Dividend Update
The company’s board of directors has enhanced its share repurchase authorization to $1.25 billion backed by its solid balance sheet and robust cash flows.
Concurrent with third-quarter earnings release, the company approved a dividend of 19.5 cents per share, payable Dec 31, 2020 to its shareholders of record as of Dec 17. These shareholder-friendly moves indicate the company’s commitment to return value to shareholders.
Business Update
Global Payments forged a relationship with Amazon Web Services (AWS) to be its preferred cloud provider for its issuer business.
The company has not only signed a multi-year payments pact with TD Bank Group but has also renewed its agreement with Wells Fargo through its Issuer Solutions business — Total System Services (TSYS).
Moreover, the company anticipates annual run rate expense synergies from the TSYS merger to be $375 million, which indicates an increase from the previous estimate of $350 million. The company is on track to achieve at least $125 million in annual run rate revenue synergies and $400 million in additional annual run rate expense savings in relation to the COVID-19 pandemic.
Zacks Rank and Performances of Other Industry Players
Among other companies in the same space that already reported September-quarter earnings so far, the bottom-line results of Diebold Nixdorf, Incorporated (DBD - Free Report) , Equifax Inc. (EFX - Free Report) and Visa Inc. (V - Free Report) beat the respective Zacks Consensus Estimate by 12.00%, 16.15% and 2.75%, respectively.
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Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Global Payments (GPN) Q3 Earnings & Revenues Top Estimates
Global Payments Inc. (GPN - Free Report) third-quarter 2020 adjusted earnings of $1.71 per share beat the Zacks Consensus Estimate by 10.3%. Also, the bottom line improved 8.2% year over year.
Adjusted net revenues declined 4% year over year to $1.75 billion. However, the top line surpassed the Zacks Consensus Estimate by 1.4%.
Adjusted operating margin was 41.1%, up 250 basis points (bps) year over year.
The company’s results reflect constant market recovery and cost-control efforts, which have been driving margins. However, the results have been partially offset by softer revenues across most segments barring Business and Consumer Solutions.
Segmental Performances
Merchant Solutions: Adjusted revenues of $1.1 billion at this segment decreased 6.2% year over year. Operating income of $532.3 million fell 5.3% year over year.
Issuer Solutions: Adjusted net revenues of $433.4 million fell 2.5% year over year. Operating income of $187.7 million increased 10.3% year over year.
Business and Consumer Solution: The segment reported adjusted net revenues of $204.1 million, up 7.2% year over year. Operating income was $52.3 million, up 48.3% year over year.
Global Payments Inc. Price, Consensus and EPS Surprise
Global Payments Inc. price-consensus-eps-surprise-chart | Global Payments Inc. Quote
Balance Sheet Position (as of Sep 30, 2020)
Total cash and cash equivalents were $2.2 billion, which surged 32.3% from the level as of Dec 31, 2019.
Long-term debt was $8.4 billion, down 7.2% from the level at 2019 end.
Net cash provided by operating activities for the first nine months of 2020 was $1.5 billion, up 14.5% from the year-ago comparable period.
Share Repurchase and Dividend Update
The company’s board of directors has enhanced its share repurchase authorization to $1.25 billion backed by its solid balance sheet and robust cash flows.
Concurrent with third-quarter earnings release, the company approved a dividend of 19.5 cents per share, payable Dec 31, 2020 to its shareholders of record as of Dec 17. These shareholder-friendly moves indicate the company’s commitment to return value to shareholders.
Business Update
Global Payments forged a relationship with Amazon Web Services (AWS) to be its preferred cloud provider for its issuer business.
The company has not only signed a multi-year payments pact with TD Bank Group but has also renewed its agreement with Wells Fargo through its Issuer Solutions business — Total System Services (TSYS).
Moreover, the company anticipates annual run rate expense synergies from the TSYS merger to be $375 million, which indicates an increase from the previous estimate of $350 million. The company is on track to achieve at least $125 million in annual run rate revenue synergies and $400 million in additional annual run rate expense savings in relation to the COVID-19 pandemic.
Zacks Rank and Performances of Other Industry Players
Global Payments carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other companies in the same space that already reported September-quarter earnings so far, the bottom-line results of Diebold Nixdorf, Incorporated (DBD - Free Report) , Equifax Inc. (EFX - Free Report) and Visa Inc. (V - Free Report) beat the respective Zacks Consensus Estimate by 12.00%, 16.15% and 2.75%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>