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Global Payments (GPN) Q4 Earnings Beat Estimates, Rise Y/Y
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Global Payments, Inc. (GPN - Free Report) came up with fourth-quarter 2019 adjusted earnings of $1.62 per share, beating the Zacks Consensus Estimate by 7.3% and improving 21.8% year over year.
The quarterly results reflect higher revenues driven by the acquisition of Total System in the second quarter, partly offset by increase in expenses.
Global Payments Inc. Price, Consensus and EPS Surprise
The company’s adjusted revenues of $1.8 billion were up 120% year over year.
Total operating expenses of $1.79 billion increased 151% year over year, led by higher cost of services as well as selling, general and administration expenses.
Growth Across Segments
Merchant Solutions: Adjusted revenues of $1.16 billion increased 42.7% year over year. Operating income of $522.5 million was up 46.9% year over year.
Issuer Solutions: Adjusted net revenues plus network fees of $459 million grew from $5.3 million in the year-ago quarter. Operating income was $184.7 million compared with $3.4 million in the year-ago quarter.
Business and Consumer Solution: This segment was formed after the acquisition of Total System. It reported adjusted net revenues plus network fees of $199.5 million. Operating income was $42.8 million.
Balance Sheet Position
Total cash and cash equivalents as of Dec 31, 2019 were $1.68 billion, up 38.8% year over year.
Long-term debt as of Dec 31, 2019 was $9.1 billion, up 82% from year-end 2018 level.
Net cash provided by operating activities for 2019 was $1.39 billion, up 25.2% year over year.
Dividend Announcement
The company approved a dividend of 19.5 cents per share payable Mar 27, 2020 to shareholders of record as of Mar 13, 2020.
2020 Outlook
For 2020, the company expects adjusted net revenues of $7.68 billion to $7.75 billion, indicating growth of 67-69% or 8-9% on a combined basis. Annual adjusted operating margin for the year is expected to expand by up to 250 basis points on a combined basis and 75 basis points on a reported basis. The company expects adjusted earnings per share growth of 20-23% over 2019 to $7.43 to $7.62.
Zacks Rank and Performances of Other Industry Players
Other companies in the same space that have reported fourth-quarter earnings are Mastercard Incorporated (MA - Free Report) , American Express Co. (AXP - Free Report) and Discover Financial Services (DFS - Free Report) , each beating their Zacks Consensus Estimate by 4.81%, 1.5% and 0.9%, respectively.
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Global Payments (GPN) Q4 Earnings Beat Estimates, Rise Y/Y
Global Payments, Inc. (GPN - Free Report) came up with fourth-quarter 2019 adjusted earnings of $1.62 per share, beating the Zacks Consensus Estimate by 7.3% and improving 21.8% year over year.
The quarterly results reflect higher revenues driven by the acquisition of Total System in the second quarter, partly offset by increase in expenses.
Global Payments Inc. Price, Consensus and EPS Surprise
Global Payments Inc. price-consensus-eps-surprise-chart | Global Payments Inc. Quote
Behind the Headlines
The company’s adjusted revenues of $1.8 billion were up 120% year over year.
Total operating expenses of $1.79 billion increased 151% year over year, led by higher cost of services as well as selling, general and administration expenses.
Growth Across Segments
Merchant Solutions: Adjusted revenues of $1.16 billion increased 42.7% year over year. Operating income of $522.5 million was up 46.9% year over year.
Issuer Solutions: Adjusted net revenues plus network fees of $459 million grew from $5.3 million in the year-ago quarter. Operating income was $184.7 million compared with $3.4 million in the year-ago quarter.
Business and Consumer Solution: This segment was formed after the acquisition of Total System. It reported adjusted net revenues plus network fees of $199.5 million. Operating income was $42.8 million.
Balance Sheet Position
Total cash and cash equivalents as of Dec 31, 2019 were $1.68 billion, up 38.8% year over year.
Long-term debt as of Dec 31, 2019 was $9.1 billion, up 82% from year-end 2018 level.
Net cash provided by operating activities for 2019 was $1.39 billion, up 25.2% year over year.
Dividend Announcement
The company approved a dividend of 19.5 cents per share payable Mar 27, 2020 to shareholders of record as of Mar 13, 2020.
2020 Outlook
For 2020, the company expects adjusted net revenues of $7.68 billion to $7.75 billion, indicating growth of 67-69% or 8-9% on a combined basis. Annual adjusted operating margin for the year is expected to expand by up to 250 basis points on a combined basis and 75 basis points on a reported basis. The company expects adjusted earnings per share growth of 20-23% over 2019 to $7.43 to $7.62.
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.
Other companies in the same space that have reported fourth-quarter earnings are Mastercard Incorporated (MA - Free Report) , American Express Co. (AXP - Free Report) and Discover Financial Services (DFS - Free Report) , each beating their Zacks Consensus Estimate by 4.81%, 1.5% and 0.9%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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