Total System Services Increases Sales but Misses Estimates on Earnings

Total System Services (NYSE: TSS  ) reported earnings on Jan. 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Total System Services met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue expanded slightly and GAAP earnings per share expanded.

Gross margins grew, operating margins contracted, net margins were steady.

Revenue details
Total System Services logged revenue of $479.1 million. The 11 analysts polled by S&P Capital IQ expected revenue of $484.5 million on the same basis. GAAP reported sales were 1.5% higher than the prior-year quarter's $472.2 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.32. The 21 earnings estimates compiled by S&P Capital IQ predicted $0.33 per share. GAAP EPS of $0.32 for Q4 were 3.2% higher than the prior-year quarter's $0.31 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 34.1%, 250 basis points better than the prior-year quarter. Operating margin was 18.7%, 30 basis points worse than the prior-year quarter. Net margin was 12.7%, about the same as the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $480.8 million. On the bottom line, the average EPS estimate is $0.34.

Next year's average estimate for revenue is $1.98 billion. The average EPS estimate is $1.44.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 182 members out of 198 rating the stock outperform, and 16 members rating it underperform. Among 61 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 59 give Total System Services a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Total System Services is hold, with an average price target of $25.12.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. TMFDisclosureHere


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8/1/2014 4:03 PM
TSS $31.96 Down -0.04 -0.12%
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