Global Payments Inc. (GPN), first quarter 2011 earnings per share of 61 cents (according to the GAAP figures provided by the company) fails to beat Zacks Consensus Estimate of 69 cents per share and also decreased 14.1% from prior year quarter.
Revenue increased marginally 7% to $440.1 million compared to $409.1 million from year ago quarter. The rise in revenue was primarily attributed to 15% and 16% rise in revenue from US and Asia Pacific, respectively. But revenues from Europe dipped 8% compared to same quarter last year.
However a rise in operating expense and dip in operating income outpaced the rise in revenue and hence resulted in the decrease of EPS compared on year-over-year basis.
Quarter in Detail
Operating income decreased 4% to $82.1 million and operating expenses increased 12% to $358 million from the same quarter last year.
Gross profit increased 7.6% to $289.1 million from the year ago quarter and gross margin increased 0.1 percentage points to 65.7%.
Both operating profit and net profit decreased 8.1% and 10.8% to $82.1 million and $53.8 million respectively from the prior year quarter. Operating margin decreased 3.1 percentage points and net profit margin decreased 2.5 percentage points.
Quarter Ahead
Both operating profit and net profit decreased 8.1% and 10.8% to $82.1 million and $53.8 million respectively from the prior year quarter. Operating margin decreased 3.1 percentage points and net profit margin decreased 2.5 percentage points.
Quarter Ahead
Global Payments expects the fiscal 2011 annual revenue to be in range of $1,735 million to $1,770 million reflecting a growth of 6% to 8% over fiscal 2010. Annual EPS for fiscal 2011 is expected to be in the range of $2.68 to $2.77.
Conclusion
Conclusion
Analysts’ estimates for the quarter have been going down over the past 30 days, with 3 analysts lowering estimates and only 1 analyst raising estimate. The average estimate was 69 cents when the company reported earnings. We note that Global Payments has consistently exceeded estimates over the past year or so. The average surprise in the preceding 4 quarters is a positive 9.2%, but the current quarter reflected a decrease in its reported earnings compared with the estimates.
GLOBAL PAYMENTS (GPN): Free Stock Analysis Report
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