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Alliance Data (ADS) Misses on Q1 Earnings, Suspends '20 View
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Alliance Data Systems Corporation’s first-quarter 2020 operating earnings of 75 cents per share missed the Zacks Consensus Estimate by 84.8%. The bottom line also declined 80% year over year.
The company’s results were dented by increased provision expense.
Behind the Headlines
Alliance Data reported total revenues of $1.4 billion, up 4% year over year. Notably, the top line outpaced the Zacks Consensus Estimate by 4.2%. The upside can be attributed to strong performance of the company’s Card Services segment, which contributed 85.7% to the first quarter top line.
Operating expenses increased 24.6% year over year to $1.2 billion, primarily due to rise in provision expense.
Adjusted EBITDA (net of funding costs) declined 74% year over year to $83 million.
Alliance Data Systems Corporation Price, Consensus and EPS Surprise
Card Services revenues were $1.2 billion, up 5% year over year. This segment benefited from an improved gross yield. However, adjusted EBITDA was $47 million, down 84% year over year.
LoyaltyOne revenues totaled $198.1 million, down 3% year over year. The downside can be attributable to the company’s decision to divest Precima in January of this year. Adjusted EBITDA increased 5% to $57.8 million. AIR MILES reward miles issued was up 5% year over year, primarily due to rise in sponsor promotions in the beginning of the first quarter.
Dividend Update
Concurrent with the first-quarter 2020 earnings release, the company’s board of directors approved a quarterly cash dividend of 21 cents per share, which reflects a reduction of 66.7% from the prior dividend payout of 63 cents. The dividend will be paid on Jun 18, 2020 to shareholders of record as on May 14.
Financial Update
As of Mar 31, 2020, cash and cash equivalents was $4.5 billion, up 15% from Dec 31, 2019-level.
At quarter end, debt level increased 7.9% from 2019-end to $3.1 billion.
2020 Guidance Withdrawn
The COVID-19 pandemic has sparked recessionary fears globally. It has also put the entire U.S. economy in a sluggish phase. Consequently, Alliance Data withdrew its prior guidance of 2020.
Zacks Rank
Alliance Data currently carries a Zacks Rank #5 (Strong Sell).
Some stocks worth considering from the business services sector with a perfect combination of elements to surpass estimates in the upcoming quarterly releases are as follows:
Huron Consulting Group Inc. (HURN - Free Report) presently has an Earnings ESP of +3.20% and a Zacks Rank of 2. The company is set to report first-quarter 2020 results on Apr 30.
Spotify Technology S.A. (SPOT - Free Report) currently has an Earnings ESP of +26.53% and a Zacks Rank #3. The company is slated to announce first-quarter 2020 results on Apr 29.
ICF International, Inc. (ICFI - Free Report) has an Earnings ESP of +3.08% and a Zacks Rank of 3, at present. The company is slated to announce first-quarter 2020 earnings on May 5.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Alliance Data (ADS) Misses on Q1 Earnings, Suspends '20 View
Alliance Data Systems Corporation’s first-quarter 2020 operating earnings of 75 cents per share missed the Zacks Consensus Estimate by 84.8%. The bottom line also declined 80% year over year.
The company’s results were dented by increased provision expense.
Behind the Headlines
Alliance Data reported total revenues of $1.4 billion, up 4% year over year. Notably, the top line outpaced the Zacks Consensus Estimate by 4.2%. The upside can be attributed to strong performance of the company’s Card Services segment, which contributed 85.7% to the first quarter top line.
Operating expenses increased 24.6% year over year to $1.2 billion, primarily due to rise in provision expense.
Adjusted EBITDA (net of funding costs) declined 74% year over year to $83 million.
Alliance Data Systems Corporation Price, Consensus and EPS Surprise
Alliance Data Systems Corporation price-consensus-eps-surprise-chart | Alliance Data Systems Corporation Quote
Segment Update
Card Services revenues were $1.2 billion, up 5% year over year. This segment benefited from an improved gross yield. However, adjusted EBITDA was $47 million, down 84% year over year.
LoyaltyOne revenues totaled $198.1 million, down 3% year over year. The downside can be attributable to the company’s decision to divest Precima in January of this year. Adjusted EBITDA increased 5% to $57.8 million. AIR MILES reward miles issued was up 5% year over year, primarily due to rise in sponsor promotions in the beginning of the first quarter.
Dividend Update
Concurrent with the first-quarter 2020 earnings release, the company’s board of directors approved a quarterly cash dividend of 21 cents per share, which reflects a reduction of 66.7% from the prior dividend payout of 63 cents. The dividend will be paid on Jun 18, 2020 to shareholders of record as on May 14.
Financial Update
As of Mar 31, 2020, cash and cash equivalents was $4.5 billion, up 15% from Dec 31, 2019-level.
At quarter end, debt level increased 7.9% from 2019-end to $3.1 billion.
2020 Guidance Withdrawn
The COVID-19 pandemic has sparked recessionary fears globally. It has also put the entire U.S. economy in a sluggish phase. Consequently, Alliance Data withdrew its prior guidance of 2020.
Zacks Rank
Alliance Data currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Some stocks worth considering from the business services sector with a perfect combination of elements to surpass estimates in the upcoming quarterly releases are as follows:
Huron Consulting Group Inc. (HURN - Free Report) presently has an Earnings ESP of +3.20% and a Zacks Rank of 2. The company is set to report first-quarter 2020 results on Apr 30.
Spotify Technology S.A. (SPOT - Free Report) currently has an Earnings ESP of +26.53% and a Zacks Rank #3. The company is slated to announce first-quarter 2020 results on Apr 29.
ICF International, Inc. (ICFI - Free Report) has an Earnings ESP of +3.08% and a Zacks Rank of 3, at present. The company is slated to announce first-quarter 2020 earnings on May 5.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>