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Global Payments (GPN) Q3 Earnings Beat, Ups '21 EPS View
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Global Payments Inc. (GPN - Free Report) delivered third-quarter 2021 adjusted earnings per share (EPS) of $2.18, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line improved 28% year over year.
Adjusted net revenues rose 15% year over year to $2 billion in the third quarter. The top line outpaced the consensus mark by 0.6%.
Adjusted operating margin of 42.8% improved 170 basis points (bps) year over year in the quarter under review.
The company’s results benefited on the back of solid top-line growth driven by strong segmental contributions from its Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions segments. However, the quarterly results were partly offset by elevated operating costs.
Total operating expenses escalated 10.7% year over year to $1.8 billion due to rise in cost of service, and higher selling, general and administrative costs.
Global Payments Inc. Price, Consensus and EPS Surprise
Merchant Solutions: Adjusted net revenues of this segment advanced 20.6% year over year to $1.4 billion in the quarter under review. Operating income of $669.5 million climbed 25.8% year over year.
Issuer Solutions: The segment reported adjusted net revenues of $457.8 million, which advanced 5.6% year over year. Operating income rose 5.8% year over year to $198.5 million in the third quarter.
Business and Consumer Solutions: Adjusted net revenues of this segment inched up 1.7% year over year to $207.7 million in the quarter under review. Operating income of $53.1 million increased 1.6% year over year.
Balance Sheet Position (as of Sep 30, 2021)
The company exited the third quarter with cash and cash equivalents of $2.3 billion, which rose 20.7% from the 2020-end level.
Long-term debt amounted to $10.7 billion, reflecting an increase of 26.5% from the figure as of Dec 31, 2020.
Shareholders’ equity of $26.1 billion declined 4.3% from the level at the 2020 end.
For the nine months ended Sep 30, 2021, net cash provided by operating activities climbed 31.3% from the prior-year comparable period to $2 billion.
Dividend Update
Management approved a quarterly dividend of 25 cents per share, which will be paid out on Dec 30, 2021 to shareholders of record as on Dec 16, 2021.
Business Update
Global Payments extended key issuer technology partnerships with CIBC and CITI. Besides, the company bolstered the duration and scope of its ties with PayPal Holdings, Inc. (PYPL - Free Report) .
The company has also been chosen to be the official commerce technology provider of Mercedes-Benz stadium.
It partnered with Virgin Money in a bid to introduce an integrated payment offering equipped with enhanced digital prowess for Virgin Money’s customers.
In an effort to strengthen its presence across the business-to-business (B2B) cloud payments space, the company acquired Mineral Tree.
Global Payments completed purchase of the merchant services business of Bankia from its CaxiaBank’s partners. The move will strengthen the European presence of Global Payments.
The company completed the buyout of Worldline’s PayOne Austrian POS acquiring assets. The move is aimed at showcasing the innovative distribution and market-leading technologies of Global Payments across the most luring markets worldwide.
2021 Guidance Updated
Based on strong third-quarter results and favorable business trends, Global Payments revised its 2021 outlook with respect to adjusted net revenues and adjusted EPS.
The company now anticipates adjusted net revenues within $7.71-$7.73 billion for 2021 compared with the previous guidance of $7.70-$7.73 billion. The newly provided outlook continues to indicate 14-15% growth from the 2020 reported figure.
Adjusted EPS is estimated between $8.10 and $8.20, up from the prior view of $8.07-$8.20. The revised guidance suggests an improvement of 27-28% from the year-ago reported figure.
Other Financial Transaction Services Industry Releases
Some other companies in the financial transaction services space that have already released third-quarter results are Mastercard Incorporated (MA - Free Report) and Alliance Data Systems Corporation , which beat earnings estimates by 8.72% and 27.35%, respectively.
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Global Payments (GPN) Q3 Earnings Beat, Ups '21 EPS View
Global Payments Inc. (GPN - Free Report) delivered third-quarter 2021 adjusted earnings per share (EPS) of $2.18, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line improved 28% year over year.
Adjusted net revenues rose 15% year over year to $2 billion in the third quarter. The top line outpaced the consensus mark by 0.6%.
Adjusted operating margin of 42.8% improved 170 basis points (bps) year over year in the quarter under review.
The company’s results benefited on the back of solid top-line growth driven by strong segmental contributions from its Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions segments. However, the quarterly results were partly offset by elevated operating costs.
Total operating expenses escalated 10.7% year over year to $1.8 billion due to rise in cost of service, and higher selling, general and administrative costs.
Global Payments Inc. Price, Consensus and EPS Surprise
Global Payments Inc. price-consensus-eps-surprise-chart | Global Payments Inc. Quote
Segmental Performances
Merchant Solutions: Adjusted net revenues of this segment advanced 20.6% year over year to $1.4 billion in the quarter under review. Operating income of $669.5 million climbed 25.8% year over year.
Issuer Solutions: The segment reported adjusted net revenues of $457.8 million, which advanced 5.6% year over year. Operating income rose 5.8% year over year to $198.5 million in the third quarter.
Business and Consumer Solutions: Adjusted net revenues of this segment inched up 1.7% year over year to $207.7 million in the quarter under review. Operating income of $53.1 million increased 1.6% year over year.
Balance Sheet Position (as of Sep 30, 2021)
The company exited the third quarter with cash and cash equivalents of $2.3 billion, which rose 20.7% from the 2020-end level.
Long-term debt amounted to $10.7 billion, reflecting an increase of 26.5% from the figure as of Dec 31, 2020.
Shareholders’ equity of $26.1 billion declined 4.3% from the level at the 2020 end.
For the nine months ended Sep 30, 2021, net cash provided by operating activities climbed 31.3% from the prior-year comparable period to $2 billion.
Dividend Update
Management approved a quarterly dividend of 25 cents per share, which will be paid out on Dec 30, 2021 to shareholders of record as on Dec 16, 2021.
Business Update
Global Payments extended key issuer technology partnerships with CIBC and CITI. Besides, the company bolstered the duration and scope of its ties with PayPal Holdings, Inc. (PYPL - Free Report) .
The company has also been chosen to be the official commerce technology provider of Mercedes-Benz stadium.
It partnered with Virgin Money in a bid to introduce an integrated payment offering equipped with enhanced digital prowess for Virgin Money’s customers.
In an effort to strengthen its presence across the business-to-business (B2B) cloud payments space, the company acquired Mineral Tree.
Global Payments completed purchase of the merchant services business of Bankia from its CaxiaBank’s partners. The move will strengthen the European presence of Global Payments.
The company completed the buyout of Worldline’s PayOne Austrian POS acquiring assets. The move is aimed at showcasing the innovative distribution and market-leading technologies of Global Payments across the most luring markets worldwide.
2021 Guidance Updated
Based on strong third-quarter results and favorable business trends, Global Payments revised its 2021 outlook with respect to adjusted net revenues and adjusted EPS.
The company now anticipates adjusted net revenues within $7.71-$7.73 billion for 2021 compared with the previous guidance of $7.70-$7.73 billion. The newly provided outlook continues to indicate 14-15% growth from the 2020 reported figure.
Adjusted EPS is estimated between $8.10 and $8.20, up from the prior view of $8.07-$8.20. The revised guidance suggests an improvement of 27-28% from the year-ago reported figure.
Zacks Rank
Global Payments currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Financial Transaction Services Industry Releases
Some other companies in the financial transaction services space that have already released third-quarter results are Mastercard Incorporated (MA - Free Report) and Alliance Data Systems Corporation , which beat earnings estimates by 8.72% and 27.35%, respectively.