Global Payments Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Global Payments (NYS: GPN) reported earnings on April 2. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Feb. 29 (Q3), Global Payments met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.


Margins expanded across the board.

Revenue details
 Global Payments booked revenue of $533.5 million. The 25 analysts polled by S&P Capital IQ anticipated a top line of $529.4 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $456.4 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.73. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.76 per share. GAAP EPS of $0.73 for Q3 were 24% higher than the prior-year quarter's $0.59 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 63.6%, 50 basis points better than the prior-year quarter. Operating margin was 17.3%, 20 basis points better than the prior-year quarter. Net margin was 10.9%, 40 basis points better than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $579.4 million. On the bottom line, the average EPS estimate is $0.87.

Next year's average estimate for revenue is $2.19 billion. The average EPS estimate is $3.20.

Investor sentiment
 The stock has a two-star rating (out of five) at Motley Fool CAPS, with 239 members out of 273 rating the stock outperform, and 34 members rating it underperform. Among 94 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 85 give Global Payments a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Global Payments is outperform, with an average price target of $52.52.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.

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