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What's in Store for Global Payments (GPN) Earnings in Q1?

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Global Payments Inc. (GPN - Free Report) is slated to report first-quarter 2021 results on May 4, before market open.

In the last reported quarter, the company’s earnings of $1.80 per share beat the Zacks Consensus Estimate by 1.7% and also improved 11.1% year over year on lower costs.

Factors Likely to Impact Q1 Results

Consolidated revenues for the to-be-reported quarter are likely to have gained from additional revenues from the acquired operations of Total System, partially offset by the unfavorable effects of COVID-19.

In the Merchant Solutions segment, the company is expected to have seen higher revenues, driven by a pick-up in consumer spending and the restart the company’s merchant customer businesses in North America, Europe and the Asia Pacific.  The company’s proprietary software portfolio, AdvancedMD, might have witnessed record bookings in the to-be-reported quarter. The Zacks Consensus Estimate for operating revenues in this segment is pegged at $5 32 million, indicating 6.4% growth from the year-ago reported figure.

In the Issuer Solution segment, transaction volumes are likely to have recovered while traditional accounts on file are expected to have increased. However, the commercial card business is likely to have been persistently weak due to limited corporate travel. The company anticipates absorbing the impact of a portfolio sale by one of its customers, which might affect its results for the first quarter and also for the remainder of the year. The Zacks Consensus Estimate for operating revenues in this segment stands at $187 million, implying a 6.9% rise from the year-ago reported figure.

In the Business and Consumer solutions segment, gross dollar volume is likely to have expanded, driven by stimulus payment disbursement. The Zacks Consensus Estimate for operating revenues in this segment is pegged at $221 million, hinting at 3% growth from the year-ago reported figure.

The company implemented cost-saving actions, such as reductions in employee compensation costs and discretionary spending to help mitigate the negative impact of COVID-19 on its finances. Further, these strategic measures are likely to have reduced its operating expenses and aided margins.

Shares bought back by the company are expected to have lowered the amount of shares outstanding, which might have contributed to its bottom line.

Q1 Earnings and Revenue Estimates

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.77, indicating a 12.03% increase from the year-ago quarter’s reported figure. The consensus mark for revenues stands at $1.76 billion, suggesting a 2.01% rise from the year-earlier quarter’s reported number.

Earnings Surprise History

The company’s bottom line surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.05%.

 

Global Payments Inc. Price and EPS Surprise

Global Payments Inc. Price and EPS Surprise

Global Payments Inc. price-eps-surprise | Global Payments Inc. Quote

What Our Quantitative Model Predicts

Our proven model does not predict an earnings beat for Global Payments this time around. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But this is not the case here.

Earnings ESP:  Global Payments has an Earnings ESP of -0.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 

Zacks Rank:  Global Payments carries a Zacks Rank #3, currently.

Stocks to Consider

Some stocks worth considering with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Intercorp Financial Services Inc. (IFS - Free Report) has an Earnings ESP of +6.77% and a Zacks Rank #2, currently.

Fidelity National Information Services, Inc. (FIS - Free Report) has an Earnings ESP of +2.01% and a Zacks Rank of 3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

PayPal Holdings, Inc. (PYPL - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank of 3, currently.
 

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