Tuesday, electronic payment processing and related services provider Total System Services, Inc. (TSS) reported a 17.8% year-over-year decline in profit for the first quarter, hurt by currency translations as well as lower revenues. The company also lowered it net income and revenue forecast for the full-year 2009.
In a statement, chairman and chief executive officer, Philip Tomlinson said, "We continue to feel the impact of the current economic crisis, as evidenced by our cardholder transaction volumes decreasing 4.3%, and our point-of-sale volume increasing only 1%. This economic driven slowdown in the market, combined with discontinued operations, has led us to adjust our guidance for 2009."
The Columbus, Georgia-based company reported net income of $46.53 million or $0.24 per share for the first quarter, down about 17% from $56.61 million or $0.29 per share in the prior year quarter.
On average, fourteen analysts polled by Thomson Reuters expected earnings of $0.30 per share for the first quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter decreased 2.6% to $408.93 million from $419.83 million in the same quarter last year. Twelve analysts had a consensus revenue estimate of $473.80 million for the first quarter. On a constant currency, revenues increased 2.8% to $431.52 million from last year.
Segment-wise, revenues for North American services decreased 6.3% to $268.8 million from, while international services generated revenues of $73.8 million, up 5.7% from the year-ago quarter. Merchant services' revenue increased 6.4% year-over-year to $75.5 million from last year.
Services-wise, electronic payment processing services revenues for the first quarter decreased 5.5% to $232.12 million from the prior-year quarter, while revenues for merchant acquiring services was $65.48 million, up 6.1% from the same quarter of the prior year. Other services revenues totaled $47.85 million, 4.6% higher than the year-ago quarter, while revenues for reimbursable items declined 4.8% to $63.49 million from the prior-year quarter.
On a geographical basis, the U.S. region revenues decreased 3.8% to $300.4 million from the prior-year quarter, while revenues for Europe region were $57.8 million, down 1.8% from the same quarter of the prior year. Canada region generated revenues of $30.6 million, 3.2% lower than the year-ago quarter. Revenues for Japan region surged 49.2% to $11.1 million, while Mexico region revenues dropped 41.2% to $2.2 million from last year.
Operating income for the first quarter declined 9.3% or 5.5% on constant currency to $78.11 million from $86.10 million in the prior-year quarter. Total operating expenses was $330.82 million, down 0.9% from $333.73 million in the year-ago quarter.
The company ended the first quarter with cash and cash equivalents of $277.55 million, compared to $242.65 million at end of the prior-year quarter.
Looking ahead to fiscal 2009, the company expects net income in a range of $217 to $221 million, representing a decline of 13% to 11%, on total revenues between $1.637 billion to $1.665 billion, representing a decline of 5% to 3%. Street analysts anticipate earnings of $1.25 per share on revenues of $1.95 billion.
The company previously expected revenues growth of 0% to 2%, and net income decline of 3% to 0% from last year. The company also added that it is committed in continuing to reduce costs and improve operating margin.
TSS closed Tuesday's regular trading session at $14.50, down $0.08 or 0.55% on a volume of 1.34 million shares, lower than the three-month average volume of 1.75 million shares. In the after-hours, the shares gained $1.20 or 8.88%.
For comments and feedback: editorial@rttnews.com