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Global Payments' (GPN) Q4 Earnings Top Estimates, Rise Y/Y

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Global Payments Inc. (GPN - Free Report) came up with fourth-quarter 2018 adjusted earnings of $1.33 per share, beating the Zacks Consensus Estimate by 0.8% and also improving 24.3% year over year.

The reported quarter benefited both from the company’s higher revenues and decreased 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 0.1%, mainly driven by segmental performances.

Total operating expense of $713.6 million decreased 21.2% year over year, led by a lower cost of services.

Adjusted operating margin expanded 80 basis points to 31.6%.

Global Payments Inc. Price, Consensus and EPS Surprise

Global Payments Inc. Price, Consensus and EPS Surprise | Global Payments Inc. Quote

Growth Across Segments

North America: Adjusted net revenues plus network fees of $765 million increased 13.9% year over year. Operating income of $247 million was up 20% year over year.

Europe: Adjusted net revenues plus network fees of $188 million grew 7.7% year over year. Operating income of $89.6 million rose 7.6% year over year.

Asia-Pacific: Adjusted net revenues plus network fees of $84.7 million climbed 9.5% year over year. Operating income of $29 million improved 10.7% year over year.

Share Repurchase and Dividend Update

Global Payments’ board of directors has approved a dividend of 1 cent per share, payable Mar 29, 2019 to shareholders of record as of Mar 15, 2019.

The company ramped up its share repurchase program to $750 million.

Balance Sheet Position

Total cash and cash equivalents as of Dec 31, 2018 were $1.2 billion, down 9.4% from $1.3 billion as of Dec 31, 2017.

Long-term debt as of Dec 31, 2018 was $5 billion, up 10% from the level at 2017 end.

Net cash provided by operating activities for 2018 was $1.1 billion, up 116% year over year.

Full-Year Highlights

For 2018, adjusted revenues plus network fees increased 15% to $3.97 billion. Adjusted earnings per share grew $5.19, up 29% 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 $5.90-$6.10.

Zacks Rank and Performances of Other Industry Players

Global Payments carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players from the finance sector having reported fourth-quarter earnings so far, the bottom-line results of Synchrony Financial (SYF - Free Report) , Intercontinental Exchange Inc. (ICE - Free Report) and MarketAxess Holdings Inc. (MKTX - Free Report) outpaced the respective Zacks Consensus Estimate.

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