The 10-second takeaway
For the quarter ended Nov. 30 (Q2), Global Payments beat slightly on revenues and missed on earnings per share.
Compared to the prior-year quarter, revenue grew significantly, and earnings per share improved significantly.
Margins dropped across the board.
Global Payments recorded revenue of $531 million. The 26 analysts polled by S&P Capital IQ anticipated net sales of $524 million. Sales were 20% higher than the prior-year quarter's $444 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $0.78. The 28 earnings estimates compiled by S&P Capital IQ anticipated $0.80 per share. GAAP EPS of $0.78 for Q2 were 17% higher than the prior-year quarter's $0.66 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 65.0%, 20 basis points worse than the prior-year quarter. Operating margin was 18.2%, 50 basis points worse than the prior-year quarter. Net margin was 11.5%, 60 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $529 million. On the bottom line, the average EPS estimate is $0.76.
Next year's average estimate for revenue is $2.2 billion. The average EPS estimate is $3.22.
The stock has a four-star rating out of five) at Motley Fool CAPS, with 234 members out of 259 rating the stock outperform, and 25 members rating it underperform. Among 91 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 86 give Global Payments a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Global Payments is outperform, with an average price target of $51.41.
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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. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.