Global Payments Earnings Preview

Motley Fool Staff
Updated

Investors braced for a bumpy ride ahead of Global Payments' (NYS: GPN) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings Tuesday. Global Payments is a processor of electronic transactions for merchants, multinational corporations, financial institutions, government agencies, and other business and nonprofit business enterprises.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Global Payments as a buy. But with 52.2% of analysts rating it a buy, Global Payments is still below the mean analyst rating of its nearest 10 competitors, which average 68.5% buys. Analysts like Global Payments better than competitor Green Dot overall. Seven out of 14 analysts rate Green Dot a buy compared to 12 of 23 for Global Payments. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.

  • Revenue forecasts: On average, analysts predict $517.8 million in revenue this quarter. That would represent a rise of 17.6% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.75 per share. Estimates range from $0.70 to $0.83.

What our community says:
CAPS All-Stars are solidly backing the stock with 93.2% assigning it an outperform rating. The community at large agrees with the All-Stars with 90.4% awarding it a rating of outperform. Fools are gung-ho about Global Payments, though the message boards have been quiet lately with only 81 posts in the past 30 days. Global Payments has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Global Payments' profit has risen year over year by an average of 10.1% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q4

Q3

Q2

Q1

Gross Margin

63.2%

63.1%

65.2%

65.7%

Operating Margin

17.0%

17.1%

18.7%

18.7%

Net Margin

11.3%

10.5%

12.1%

11.2%

For all our Global Payments-specific analysis, including earnings and beyond, add Global Payments to My Watchlist.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time thisarticle was published

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement