Global Payments Inc. (GPN) recently posted fiscal 2010 second-quarter earnings from continuing operations of $58 million, compared to $45.9 million in the year-ago period. Earnings per share came in at 71 cents, topping the year-ago figure of 57 cents and the Zacks Consensus Estimate of 61 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.
 
Revenues grew by 11.8% year over year to $409 million from $365.9 million in the year-ago period. The growth was primarily driven by the North American merchant services division, which increased 10.5% to $299.2 million due to a 15% growth in the U.S partially offset by a 1% decline in Canada. International merchant services business grew 15.7% to $109.8 million mainly due to the acquisition of ZAO United Card Service, a direct merchant acquirer and indirect payment processor in the Russian Federation, coupled with robust performance in the U.K.
 
Global Payments’ operating income recorded a growth of nearly 14% to $88.7 million, while operating margin improved by 40 basis points to 21.7%. The growth was primarily attributable to higher margins in the U.K. and Asia-Pacific regions partially offset by the ISO channel, which is a lower margin business as the company pays commission to ISOs.
 
At the end of the quarter, Global Payments had cash and cash equivalents of $1,090.8 million, compared to $356.2 million in the prior-ago period. During the first-half of the current fiscal, the company raised $302.5 million from issuance of notes and deployed $49.5 million towards debt repayments, $20.7 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 year ending May 2010 to between $2.35 and $2.46 per share, compared to the earlier prediction of $2.31 to $2.42 per share. The guidance is in line with the Zacks Consensus Estimate of $2.46 per share, which fell by 8 cents over the past 2 months. The most accurate estimate is even bearish at $2.41 per share.
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