We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Total System (TSS) Beats on Q1 Earnings, Raises 2018 View
Read MoreHide Full Article
Total System Services, Inc.’s first-quarter 2018 earnings per share of $1.13 surpassed the Zacks Consensus Estimate by 17% and grew 37.6% year over year. Better-than-expected results were driven by growth strong contribution from all its segments.
Net revenues of $935.5 million grew 12.3% year over year and beat the Zacks Consensus Estimate by 3.13%.
The company reported adjusted EBITDA of $330.9 million, up 15.2% from the year-ago quarter.
Total System Services, Inc. Price, Consensus and EPS Surprise
In the first quarter, net revenues for this segment increased 9.4% year over year to $423.6 million. Total transaction in this segment was 5.5 billion, up 13.8% year over year.
Operating income of $151 million was up 12.8% year over year. Operating margin of 35.6% increased 100 basis points (bps) from the year-ago quarter.
Merchant Solutions
Net revenues increased 21.8% to $317.4 million. Dollar sales volume for this segment grew 28% year over year to $37.3 billion.
Operating income advanced 20.5% to $110 million, whereas operating margin declined 30 basis points to 34.7%, from the prior-year quarter. The acquisition of Cayan during the quarter had an approximately 100-basis-point negative point impact on the merchant segment margin.
Net Spend
Net revenues increased 6.6% year over year to $210.5 million in the reported quarter. Gross dollar volume for this segment was $9.7 billion, up 0.9% from the prior-year quarter.
Operating income grew 1.4% to $49.4 million, whereas operating margin increased 50 basis points to 29.1%, from the year-ago quarter.
Financial Position
Total assets increased 19% from Dec 31, 2017 to $7.5 billion as of Mar 31, 2018. During the quarter, the company paid down $125 million of its debt consistent with the deleveraging plan and retired $200 million of its collateral loan.
Total shareholders’ equity climbed to $2.4 billion on Mar 31, 2018, from $2.2 billion, at the end of 2017.
Free cash flow totaled $165.7 million for the quarter ended Mar 31, 2018, down 35.4% from the Dec 31, 2017 levels.
2018 Guidance
Drive by strong first-quarter results and favorable expectations for the remainder of the year, the company upped its 2018 guidance. The company now expects total revenues on a GAAP basis in the range of $3.9-$4.0 billion up from the earlier guidance of $3.85-$3.95 billion down 21%-19%. On a non-GAAP basis, net revenues are anticipated in the range of $3.7-$3.8 billion (versus $3.65-$3.75 billion earlier), reflecting year-over-year growth of 9-12%.
GAAP EPS will likely be in the $3.0-$3.10 band (versus $2.85-$2.95 earlier), down 5-12% from the prior-year quarter. Adjusted EPS, is expected between $4.25 and $4.35 (compared with $4.10-$4.20), reflecting an increase of about 26-29%.
The company expects free cash flow for 2018 between $770 million and $800 million.
Zacks Rank and Stocks to Consider
Total System carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Mastercard Incorporated (MA - Free Report) , VeriFone Systems, Inc. (PAY - Free Report) and WEX Inc. (WEX - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy).
Mastercard is expected to report first-quarter 2018 earnings results on May 2. The company has an Earnings ESP of +0.83% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
WEX Inc. is expected to report first-quarter 2018 earnings results on May 3. The company has an Earnings ESP of +1.61% and a Zacks Rank #2.
VeriFone Systems beat estimates in one and met the same in three of the four reported quarters with an average positive surprise of 0.58%.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
Total System (TSS) Beats on Q1 Earnings, Raises 2018 View
Total System Services, Inc.’s first-quarter 2018 earnings per share of $1.13 surpassed the Zacks Consensus Estimate by 17% and grew 37.6% year over year. Better-than-expected results were driven by growth strong contribution from all its segments.
Net revenues of $935.5 million grew 12.3% year over year and beat the Zacks Consensus Estimate by 3.13%.
The company reported adjusted EBITDA of $330.9 million, up 15.2% from the year-ago quarter.
Total System Services, Inc. Price, Consensus and EPS Surprise
Total System Services, Inc. Price, Consensus and EPS Surprise | Total System Services, Inc. Quote
Strong Segment Results
Issuer Solutions
In the first quarter, net revenues for this segment increased 9.4% year over year to $423.6 million. Total transaction in this segment was 5.5 billion, up 13.8% year over year.
Operating income of $151 million was up 12.8% year over year. Operating margin of 35.6% increased 100 basis points (bps) from the year-ago quarter.
Merchant Solutions
Net revenues increased 21.8% to $317.4 million. Dollar sales volume for this segment grew 28% year over year to $37.3 billion.
Operating income advanced 20.5% to $110 million, whereas operating margin declined 30 basis points to 34.7%, from the prior-year quarter. The acquisition of Cayan during the quarter had an approximately 100-basis-point negative point impact on the merchant segment margin.
Net Spend
Net revenues increased 6.6% year over year to $210.5 million in the reported quarter. Gross dollar volume for this segment was $9.7 billion, up 0.9% from the prior-year quarter.
Operating income grew 1.4% to $49.4 million, whereas operating margin increased 50 basis points to 29.1%, from the year-ago quarter.
Financial Position
Total assets increased 19% from Dec 31, 2017 to $7.5 billion as of Mar 31, 2018. During the quarter, the company paid down $125 million of its debt consistent with the deleveraging plan and retired $200 million of its collateral loan.
Total shareholders’ equity climbed to $2.4 billion on Mar 31, 2018, from $2.2 billion, at the end of 2017.
Free cash flow totaled $165.7 million for the quarter ended Mar 31, 2018, down 35.4% from the Dec 31, 2017 levels.
2018 Guidance
Drive by strong first-quarter results and favorable expectations for the remainder of the year, the company upped its 2018 guidance. The company now expects total revenues on a GAAP basis in the range of $3.9-$4.0 billion up from the earlier guidance of $3.85-$3.95 billion down 21%-19%. On a non-GAAP basis, net revenues are anticipated in the range of $3.7-$3.8 billion (versus $3.65-$3.75 billion earlier), reflecting year-over-year growth of 9-12%.
GAAP EPS will likely be in the $3.0-$3.10 band (versus $2.85-$2.95 earlier), down 5-12% from the prior-year quarter. Adjusted EPS, is expected between $4.25 and $4.35 (compared with $4.10-$4.20), reflecting an increase of about 26-29%.
The company expects free cash flow for 2018 between $770 million and $800 million.
Zacks Rank and Stocks to Consider
Total System carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Mastercard Incorporated (MA - Free Report) , VeriFone Systems, Inc. (PAY - Free Report) and WEX Inc. (WEX - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy).
Mastercard is expected to report first-quarter 2018 earnings results on May 2. The company has an Earnings ESP of +0.83% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
WEX Inc. is expected to report first-quarter 2018 earnings results on May 3. The company has an Earnings ESP of +1.61% and a Zacks Rank #2.
VeriFone Systems beat estimates in one and met the same in three of the four reported quarters with an average positive surprise of 0.58%.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>