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Global Payments Q3 Profit Rises 21% - Update

Global Payments Inc. (GPN) on Monday reported a 21 percent increase in profit for the third quarter, reflecting double-digit growth in revenue.

Looking ahead, the payment-processing company lowered its reported earnings outlook for fiscal year 2012, but affirmed its cash earnings and revenue outlook.

The Atlanta, Georgia-based company had said on Sunday that a data breach in its processing system was confined to North America and affected no more than 1.5 million cards.

Global Payments' North America merchant services revenue for the third quarter rose 15 percent year-over-year to $378.78 million, with U.S. revenues up 21 percent.

International merchant services revenues for the quarter grew 23 percent to $154.76 million, with Europe revenues up 28 percent.

Paul Garcia, Chairman and CEO of Global Payments said in a statement, "We delivered solid third quarter results driven by continued steady performances in our U.S. and International businesses."

The company's net income for the third quarter increased to $57.92 million or $0.73 per share from $47.79 million or $0.59 per share in the year-ago period.

Excluding one-time items, cash earnings rose to $0.83 per share from $0.71 per share in the same period last year. On average, 24 analysts polled by Thomson Reuters expected the company to earn $0.84 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 17 percent to $533.54 million from $456.38 million in the same period last year and topped analysts' consensus estimate of $529.34 million.

Looking ahead to fiscal 2012, Global Payments lowered its reported earnings outlook to a range of $3.10 to $3.18 per share from the prior range of $3.14 to $3.22 per share.

The company noted that the revised outlook represents 19 percent to 22 percent growth over the prior year and reflects some planned cost saving initiatives for its fourth quarter.

However, the company affirmed its forecast for 2012 cash earnings in a range of $3.50 to $3.58 per share, reflecting 14 percent to 16 percent growth over fiscal 2011. The company also maintained its outlook for full-year revenues in a range of $2.15 billion to $2.20 billion.

Analysts currently expect the company to earn $3.52 per share for the year on revenues of $2.18 billion.

Global Payments said on March 30 that it identified an "unauthorized access" into its processing system. The company believes the data breach is confined to North America and less than 1.5 million cards may have been compromised.

Global Payments said that investigation revealed that Track 2 card data may have been stolen, but that cardholder names, addresses and social security numbers were not obtained by the criminals.

Based on the forensic analysis to date, network monitoring and additional security measures, the company believes the incident has been contained.

The potential security breach has reportedly affected cardholders of Visa Inc. (V) and MasterCard Inc. (MA). The U.S. Secret Service is investigating the matter.

In Monday's regular session, GPN is trading at $46.00, down $1.50 or 3.16 percent on a volume of 4.04 million shares.

by RTTNews Staff Writer

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