Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Heartland Payment Systems, (NYSE: HPY ) rose more than 10% early Wednesday after the payment-processing specialist released in-line first-quarter results and stronger-than-expected 2014 revenue guidance.
So what: Quarterly revenue rose 5.9%, to $155.5 million, which translated to adjusted earnings per share of $0.52. Analysts, on average, were looking for earnings of $0.52 per share on sales of $156 million.
For the full year 2014, Heartland reaffirmed guidance for adjusted earnings per share in the range of $2.37 to $2.41, which is also in line with expectations. In addition, Heartland called for 2014 net revenue between $645 million and $660 million, the midpoint of which stands well above analysts' estimates for revenue of $646.26 million.
Finally, Heartland noted its board has declared an $0.085 per-share quarterly dividend, and the company bought and retired roughly 696,000 shares last quarter for $28.7 million under its existing $75 million share repurchase plan.
Now what: Heartland CEO Robert Carr also appeased investors' worries by adding, "While it is has been widely reported that severe winter weather had an adverse impact on consumer spending in the first quarter, probably even more pronounced at Main Street merchants, our relationship managers were nevertheless successful in fighting the elements, signing up new merchants and extending our streak of double-digit new margin installed growth."
In the end, this was a solid quarter by any measure, and I think shares of Heartland look reasonably priced trading around 17 times this year's expected earnings. If Heartland continues to execute and rewards investors for their patience with further dividends and share repurchases, I see no reason the stock can't continue rewarding patient investors from here.
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