Dealing with adverse business trends is never easy, and Deluxe Corp. (DLX -1.44%) has had to find a way to make a transition from being an expert in printing paper checks to becoming a broader, more diversified business services company.

So far, Deluxe has done quite well in navigating that shift, and coming into Thursday's third-quarter financial report, Deluxe shareholders had positive expectations that the company's success would show up in its results. Deluxe delivered stronger earnings than most had expected, and even though revenue growth fell a bit short, the quarter's results should keep Deluxe's momentum up going into the end of the year. Let's take a closer look at the latest from Deluxe and what it means for the future.

Part of Deluxe's campaign to reinvent itself in support of Main Street businesses. Image source: Deluxe.

Deluxe keeps pushing forward

Deluxe's third-quarter results showed slow but steady progress in its long-term strategic goals toward becoming a well-diversified business. Revenue climbed 4.3% to $458.9 million, which was slightly slower than the growth pace that most of those following the stock were expecting to see. Net income rose about 3% to $58.7 million, but a drop in share count combined with adjusting for restructuring charges led to adjusted earnings coming in at $1.22 per share, which was $0.01 higher than the consensus forecast among investors.

Looking more closely at Deluxe's numbers, the financial services segment once again stood out from the crowd. Segment revenue climbed 11%, with acquisition accounting for some of the gains. But a 20% rise in adjusted operating income showed how much Deluxe has been able to push through price increases and take advantage of growth in marketing solutions provided to customers, as well as the cost containment efforts that have reduced its overall expenses.

Elsewhere, the small business services division posted more modest revenue growth of 3.4%, with better performance in channels serving online, major accounts, and dealers. However, operating income fell from year-ago levels, due in part to higher spending on the company's own marketing efforts to gain visibility in the industry. Meanwhile, as we've seen repeatedly, the direct checks segment suffered declines, with revenue falling 7% and producing an 8% drop in adjusted operating income.

Deluxe CEO Lee Schram was happy with what the company's results said about its overall direction. "Our strategy of diversifying and growing top-line revenue continued to show progress in the quarter," Schram said, "with marketing solutions and other services now accounting for over a third of total revenue." The CEO also pointed to more recent acquisitions as fleshing out Deluxe's offerings in business services to help make the company move closer to being a one-stop shop for business customers.

Can Deluxe keep climbing?

Deluxe also has high hopes for the future, believing that it is well positioned for further growth in earnings and sales. In its guidance for the fourth quarter, Deluxe said that it expects revenue of $481 million to $491 million, which it believes will produce adjusted earnings of between $1.34 and $1.39 per share. Those figures are consistent with current consensus projections among investors, with the earnings guidance actually exceeding the current estimate.

Looking at the full 2016 year, Deluxe made adjustments to its guidance in both directions. On the revenue front, Deluxe pushed its expectations lower, aiming at total sales of $1.85 billion to $1.86 billion on marketing solutions and other services revenue of $620 million to $625 million. However, the company narrowed its earnings guidance to the upper half of its previous range, expecting $4.95 to $5 per share in adjusted earnings for 2016.

Deluxe has done an impressive job of reinventing itself and finding a way to go beyond the failing check-writing business. The company still has more work to do, but if Deluxe can keep making progress as well as it has recently, then it has plenty of potential to keep producing sales and earnings growth into the future.