Thursday, payment processing and money transfer service provider Global Payments Inc. (GPN), reported a swing to loss for the third-quarter hurt by impairment charges. Revenues for the quarter, however, grew 26%, and on a constant currency basis improved 38%. The company also reaffirmed its fiscal 2009 earnings outlook.
The Atlanta, Georgia-based company reported a third-quarter net loss of $106.78 million or $1.34 per share, compared to a profit of $40.06 million or $0.50 per share in the corresponding quarter last year.
Excluding items, normalized net income for the third-quarter increased to $36.80 million or $0.45 per share from $35.34 million or $0.44 per share in the similar period last year. On average, nineteen analysts polled by Thomson Reuters estimated earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude special items.
On a constant currency basis, earnings for the third-quarter increased 25% to $0.55 per share excluding a negative foreign currency impact of $0.10 per share and impairment and restructuring charges of $1.79 per share.
Revenues for the quarter increased 26% to $392.66 million from $310.64 million in the third-quarter of fiscal 2008. Analysts estimated revenue of $377.43 million for the quarter.
On a constant currency basis, third-quarter revenues increased 38% to $428 million excluding a negative foreign currency impact of $35 million.
Paul Garcia, Chairman and CEO said, We achieved solid third quarter financial performance, in spite of continuing macroeconomic headwinds and unfavorable foreign currency trends. Our normalized results for the quarter were driven by the impact of our June 30, 2008 U.K. acquisition and strong results in our North America segment. North America continues to benefit from successful pricing initiatives in Canada and solid 15% transaction growth in the U.S.
Segment wise, North America Merchant Services revenue for the quarter increased to $274.44 million from $243.29 million in the prior-year similar period. International Merchant Services revenue for the quarter increased to $85.09 million from $33.43 million in the third-quarter of fiscal 2008. Money Transfer revenues for the quarter increased to $33.14 million from $33.92 million in the comparable period of fiscal 2008.
Impairment charges related to money transfer business for the quarter was $147.66 million, while there were no such charges in the previous year.
Total expenses for the quarter were $474.54 million compared to $250.73 million in the third-quarter last year. Sales, general and administrative expenses for the quarter increased to $180.12 million from $133.07 million in the last year similar period.
In the previous second quarter, Global Payments reported net income of $48.9 million or $0.60 per share, compared to $38.3 million or $0.48 per share in the year-ago quarter. Revenues for the second quarter increased 30% to $401.06 million from $308.78 million in the same quarter last year.
Among others in the industry, electronic payment processing and related service provider Total System Services Inc. (TSS), reported a third quarter net income of $64.1 million or $0.33 per share, down from $68.8 million or $0.35 per share in the prior year quarter. The Columbus, Georgia-based company's total revenues increased 9.4% to $500.4 million from $457.6 million in the same quarter last year.
For the nine-month period, net loss was $0.34 million or breakeven per share, compared to a profit of $121.94 million or $1.51 per share in the nine-month period of fiscal 2008.
Excluding items, normalized net profit for the nth period increased to $143.23 million or $1.77 per share from $118.09 million or $1.46 per share in the nine-month period last year.
Revenues for the nine-month period increased to $1.20 billion from $930.40 million in the corresponding period of 2008.
Looking forward, the company reaffirmed fiscal 2009 normalized earnings in the range of $2.14 to $2.21 per share, reflecting 8% to 12% growth over fiscal 2008. Analysts currently estimate earnings of $2.18 per share for the full year 2009.
The company said that in spite of a challenging economic environment, it backs the constant currency outlook for normalized earnings in the range of $2.40 to $2.47 per share reflecting a 21% to 25% growth for fiscal 2009. GAAP earnings are expected between $0.35 and $0.42 per share for the fiscal 2009 reflecting 79% to 83% negative growth.
Global Payments also maintained its fiscal 2009 revenue guidance range of between $1.55 billion and $1.58 billion, or 22% to 24% growth over fiscal 2008. Analysts currently expect revenue of $1.58 billion for the full year 2009.
On a constant currency basis, the company expects fiscal 2009 revenue in the range of $1.64 billion to $1.67 billion or 29% to 31% growth over fiscal 2008.
Global Payments closed Thursday's regular trading at $33.82, up $0.47 or 1.41%, on a volume of 1.10 million shares on the NYSE. In after-hours, the stock gained $1.40, trading at $35.22.
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