Global Payments (GPN) Q3 Earnings Beat On Higher Revenues

Global Payments Inc.’s (GPN – Free Report) earnings of $1.15 per share beat the Zacks Consensus Estimate of $1.03 and improved 29% year over year. Better-than-expected earnings were primarily due to higher revenues across its markets.

Global payments posted revenues of $930.4 million, which surpassed the Zacks Consensus Estimate of $913 million and grew 12% year over year.

Total operating expense of $866.4 million increased 4.2% year over year thanks to higher cost of service.

Adjusted operating margin improved 110 basis points to 31.3%.

Global Payments Inc. Price, Consensus and EPS Surprise

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Growth Across Segments

North America: Revenues of $685.8 million increased 10.8% year over year. Operating income of $216.9 million was up 15.2% year over year.  

Europe: Revenues of $175.8 million increased 17.2% year over year. Operating income of $83.1 million increased 17.1% year over year.

Asia-Pacific: Revenues of $68.8 million increased 15.3% year over year. Operating income of $22.2 million was up 28.4% year over year.

Strong Financial and Balance Sheet Position

Total cash and cash equivalents as of Sep 30, 2017 were $1.19 billion, up from $1.16 billion as of Dec 31, 2016.

Total long-term debt of $4.68 billion increased from $4.26 billion as of Dec 31, 2016.

The company also approved a quarterly dividend of 1 cent per share payable Dec 29, 2017.

2017 Guidance Raised

Followed by strong earnings performance in the first half, the company raised its 2017 adjusted earnings guidance to a range of $3.94 to $4.02 per share (up from $3.85 to $4.00 guided previously), which reflects growth of 24% to 26% over 2016. Adjusted net revenues are expected between $3.505 billion and $3.53 billion (versus $3.40 billion and $3.48 billion), reflecting an increase of 23% to 24% from 2016.

Business Update

During the quarter, the company completed the acquisition of the communities and sports divisions of ACTIVE Network, providing cloud-based, mission-critical enterprise software solutions to event organizers. This acquisition will be highly complementary to Global Payments’ gaming business and will expand its existing suite of innovative products and solutions.