Visa Peer Global Payments Earnings Top, Stock Pops
Payment processing firm Global Payments (NYSE:GPN) topped quarterly earnings views Wednesday, raised its full-year guidance and announced a 2-for-1 stock split, sending shares soaring to a record high.
Part of the same industry group as Visa (NYSE:V), MasterCard (NYSE:MA) and PayPal Holdings (NASDAQ:PYPL), Global Payments provides electronic payment transaction processing services to consumers, merchants, corporations, financial institutions and government agencies.
Global Payments logged adjusted earnings of $ 1.57 a share for its fiscal first quarter ended in August. That was up from $ 1.22 the prior year and well ahead of consensus estimates of $ 1.43. It was the ninth straight quarter of double-digit EPS growth.
Adjusted net revenue grew 8% to $ 537 million, while GAAP revenue climbed 6% to $ 748.8 million, also above estimates.
Global Payments guided full-year earnings in the range of $ 5.77 to $ 5.92 a share. That’s above the $ 5.72 a share analysts expected before the report.
CEO Jeff Sloan said the Q1 performance “builds on the momentum we have generated as we continue to invest in our strategy to expand distribution and create competitive differentiation through technology by delivering innovative solutions globally.”
The company’s board of directors also declared 2-for-1 split of its common stock. The stock dividend will be paid Nov. 2 to all shareholders of record Oct. 21.
Including the effect of the stock split, a first-quarter dividend of a penny a share will be payable Nov. 27 to shareholders of record Nov. 13.
Global Payments shares rose 7.7% to 124.29 in afternoon trading on the stock market today, hitting a record 125.91 intraday.
In a Monday morning note, RBC Capital Markets analyst Daniel Perlin said Global Payments is “in the middle of a multi-year mix shift to higher-margin faster-growing revenues in the international market as well as toward direct channels,” helped by acquisitions and new partnerships.
On Oct. 1, new rules mandated that merchants have credit card readers that can take cards with EMV chip technology. EMV stands for Euro Pay, MasterCard, Visa, but other card companies have adopted it. However, many retailers are not ready.
Merchants also are adapting to mobile payments such as Apple‘s (NASDAQ:AAPL) Apple Pay and Samsung Pay. Global Payments works with both.
Global Payments has an IBD Composite Rating of 94. It’s one of the top stocks in the Finance-Credit Card group, which also includes high-profile Visa, MasterCard and PayPal.
Visa has not set a date for its fiscal Q4 earnings report, though it will probably be late this month or early next month, according to Thomson Reuters. Analysts expect Visa to grow EPS 15% year-over-year. Visa shares rose 0.8% in afternoon trade Wednesday.
MasterCard is expected to post a 1% earnings gain when it reports Q3 results on Oct. 29. Its shares were up 0.7% Wednesday.
PayPay, which went public in July, is due to report Q3 earnings on Oct. 28, with analysts looking for EPS of 29 cents. PayPal fell 0.1% intraday.
Follow Vance Cariaga on Twitter: @IBD_VCariaga.