Wednesday, electronic payment processing services provider Total System Services Inc. (TSS) reported a decline in profit for the fourth quarter. The decline was mainly due to a drop in revenue from electronic payment processing services. Following the news, the company's shares fell by 13% in the after hours trade.
Net income attributable to the company declined to $60.21 million or $0.31 per share from $66.32 million or $0.34 per share for the comparable period a year-ago.
Income from continuing operations, net of tax declined to $62.90 million or $0.31 per share from $66.28 million or $0.34 per share for the comparable period a year-ago.
On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.30 per share for the quarter. Analysts' estimates typically exclude special items.
On a constant currency basis, TSYS' total revenues for the fourth quarter declined by 0.4% to $430.9 million, compared with last year. On a reported basis, total revenues increased 0.5% for the quarter to $434.8 million from $432.74 million in the year-ago period.
Ten Wall Street analysts estimated a revenue of $435.08 million for the quarter.
Segment-wise, electronic payment processing services revenue declined by 3.2% to $239.79 million from $247.74 million a year-ago. Merchant acquiring services revenue increased by 1.1% to $70.42 million from $69.64 million in the year-ago period and revenue from other services increased by 4.1% to $52.52 million from $50.46 million in the year-ago period.
According to the Columbus, Georgia-based company, total operating expenses including salaries and other personnel expenses, net technology and facilities expenses, spin related expenses and other operating expenses declined to $341.55 million from $342.30 million a year-ago.
For the full year 2009, net income attributable to the company declined to $215.21 million or $1.09 per share from $250.10 million or $1.26 per share in the year-ago period. Income from continuing operations declined to $224.33 million or $1.12 per share from $250.63 million or $1.26 per share in the year-ago period.
On a constant currency basis, total revenues for 2009 increased by 0.8% to $1.73 billion, compared with the year-ago period. On a reported basis, total revenues declined 2.0% for the year to $1.69 billion from $1.72 billion in the year-ago period.
The street estimated earnings of $1.12 per share on a revenue of $1.69 billion for the fiscal year 2009.
For the year 2010, the company expects income from continuing operations in the range of $187 million to $191 million and earnings in the range of $0.95 to $0.97 per share. It expects total revenues to range between $1.61 billion and $1.64 billion.
For the year 2010, analysts estimate earnings of $1.21 per share on revenues of $1.75 billion.
"While 2010 is going to be a challenging year, we will continue to work aggressively to reduce our costs, including reducing staff, while expanding internationally and maintaining our technological advantage in the market place," said Philip Tomlinson, chairman of the board and chief executive officer.
TSS closed Wednesday's last trade at $17.01, down $0.07 or 0.41%, on a volume of 2.42 million shares on the New York Stock Exchange. In the after hours the stock traded down $1.77 or 10.41%.
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