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What: Shares of casino partner Global Cash Access (NYS: GCA) climbed as much as 15% today after the company showed strong growth and beat earnings estimates in its quarterly report yesterday afternoon.
So what: Adjusted earnings per share of $0.23 topped estimates by $0.03, though revenue of $147 million, 9% above a year ago, came in below expectations. Further down the income statement, financials were greatly improved over the prior-year quarter, with operating income jumping 125% as the company was boosted by the Durbin Amendment, which lowered the interchange rates merchants pay for debit card transactions. Global Cash, which provides ATMs and other cash and transaction-related services for casinos, also announced an alliance with Live Gamer, a company that helps social media and video game enterprises process payments. The move should help Global Cash gain a foothold in the social-gaming industry.
Now what: This stock has been on fire since the Durbin Amendment was passed last fall, more than tripling in value since then. With a forward P/E of 8.5 and the partnership with Live Gamer possibly unlocking new revenue streams, it looks like there could be more upside potential left in the stock.
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The article Why Global Cash Access Shares Popped originally appeared on Fool.com.
Fool contributorJeremy Bowmanholds no positions in the companies above. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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