Global Payments Inc. (GPN) posted fiscal 2010 third-quarter earnings after the closing bell on Wednesday. The company swung to a net income of $48.5 million, compared to a net loss of $106.8 million in the year-ago period. Excluding certain special items, earnings per share came in at 58 cents, which topped the Zacks Consensus Estimate by 5 cents.
Global Payments offers electronic transaction processing services for consumers, merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi-national corporations located across the U.S., Canada, Latin America, Europe and the Asia-Pacific region. The company also offers processing solutions for credit and debit cards, business-to-business purchasing cards, electronic check conversion and check guarantee, verification and recovery including electronic check services and terminal management.
During the reported quarter, revenues grew by 10.8% year-over-year to $398.5 million from $359.5 million in the year-ago period. The growth was mainly driven by a 6.9% growth in North American merchant services revenue to $293.3 million, primarily due to strong performance by the ISO channel in the U.S. International merchant services revenues rose by 23.7% to $105.3 million mainly due to favorable foreign currency translations coupled with robust performance of United Card Service in Russia.
Global Payments’ operating income recorded a growth of 18.4% to $73.8 million, while operating margin increased by 120 basis points to 18.5%. The growth was primarily attributable to higher margins in the International merchant services division, particularly in Asia and the U.K.
At the end of the quarter, Global Payments had cash and cash equivalents of $589.6 million, compared to $387.6 million in the year-ago period. During the first nine months of the current fiscal, the company raised $305.0 million from issuance of notes and deployed $51.0 million towards debt repayments, $36.5 million towards capital expenditure and $17.1 million towards the acquisition of Auctionpay Inc., a provider of payment processing and software solutions for fundraising activities.
Global Payments also lifted its earnings guidance for the fiscal year ending May 2010 to a range between $2.49 and $2.54 per share on revenues of $1,615 million to $1,625 million, compared to the earlier prediction of $2.35 to $2.46 per share on revenues of $1,580 million to $1,615 million. The revised guidance is well above the Zacks Consensus Estimate of $2.47 per share, which has remained steady over the past 2 months.
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