The 10-second takeaway
For the quarter ended Feb. 29 (Q3), Global Payments met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew significantly.
Margins expanded across the board.
Global Payments booked revenue of $533.5 million. The 25 analysts polled by S&P Capital IQ anticipated a top line of $529.4 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $456.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.73. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.76 per share. GAAP EPS of $0.73 for Q3 were 24% higher than the prior-year quarter's $0.59 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 63.6%, 50 basis points better than the prior-year quarter. Operating margin was 17.3%, 20 basis points better than the prior-year quarter. Net margin was 10.9%, 40 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $579.4 million. On the bottom line, the average EPS estimate is $0.87.
Next year's average estimate for revenue is $2.19 billion. The average EPS estimate is $3.20.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 239 members out of 273 rating the stock outperform, and 34 members rating it underperform. Among 94 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 85 give Global Payments a green thumbs-up, and nine 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 $52.52.
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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.