The 10-second takeaway
For the quarter ended Feb. 28 (Q3), Global Payments met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew slightly.
Margins contracted across the board.
Global Payments reported revenue of $578.7 million. The 24 analysts polled by S&P Capital IQ expected net sales of $577.5 million on the same basis. GAAP reported sales were 8.5% higher than the prior-year quarter's $533.5 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 $0.87. The 27 earnings estimates compiled by S&P Capital IQ forecast $0.89 per share. Non-GAAP EPS of $0.87 for Q3 were 19% higher than the prior-year quarter's $0.73 per share. GAAP EPS of $0.75 for Q3 were 2.7% higher than the prior-year quarter's $0.73 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 62.4%, 120 basis points worse than the prior-year quarter. Operating margin was 15.7%, 160 basis points worse than the prior-year quarter. Net margin was 10.1%, 80 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $634.1 million. On the bottom line, the average EPS estimate is $1.01.
Next year's average estimate for revenue is $2.39 billion. The average EPS estimate is $3.69.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 243 members out of 270 rating the stock outperform, and 27 members rating it underperform. Among 93 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 86 give Global Payments a green thumbs-up, and seven 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 $54.20.
Is Global Payments playing the right part in the new technology revolution? Computers, mobile devices, and related services are creating huge amounts of valuable data, but only for companies that can crunch the numbers and make sense of it. Meet the leader in this field in "The Only Stock You Need To Profit From the NEW Technology Revolution." Click here for instant access to this free report.
- Add Global Payments to My Watchlist.
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. The Motley Fool has no position in any of the stocks mentioned. 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.