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What's in Store for Global Payments (GPN) Earnings in Q3?

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Global Payments Inc.  (GPN - Free Report) is slated to report third-quarter 2021 results on Nov 2, before market open.

Q3 Earnings and Revenue Estimates

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $2.15, indicating a 25.73% increase from the year-ago quarter’s reported figure. The consensus mark for revenues stands at $1.99 billion, suggesting a 13.85% rise from the year-earlier quarter’s reported number.

Factors to Note

Revenues of Global Payments’ biggest operating segment, which is Merchant solutions (accounting for 63% of the company’s top line), are likely to have grown as a result of higher spending. The company suffered a revenue decline last year as the COVID-19 pandemic suppressed card and payments activity among thousands of the company's small merchant clients.

The company’s Issuer Solutions business is likely to have been weighed down by weakness in commercial card business. Corporate travel, which also contributes to its top line, might have remained stressed throughout 2021. The segment will be absorbing the impact of a portfolio sale by one of its customers, which will affect it for the remainder of the year. Taking these two items into account, the company is forecasting its Issuing business to deliver adjusted net revenue growth in the low single-digit range for 2021.

The company is likely to show higher profitability in its upcoming results as a result of two primary factors. These are cost-cutting efforts and the realization of expense synergies from its $21.5-billion mega merger with the card issuer Total System Services.

Earnings Surprise History

The company has an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average being 4.02%. This is depicted in the chart below:
 

Global Payments Inc. Price and EPS Surprise

Global Payments Inc. Price and EPS Surprise

Global Payments Inc. price-eps-surprise | Global Payments Inc. Quote

What Our Quantitative Model Predicts

Our proven model does not predict an earnings beat for Global Payments this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Earnings ESP: Global Payments has an Earnings ESP of -0.83%. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.
 
Zacks Rank: Global Payments carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

The following stocks in the payments space are likely to surpass estimates this reporting cycle.  

PagSeguro Digital Ltd. (PAGS - Free Report) has an Earnings ESP of +31.41% and is presently Zacks #2 Ranked.

Square, Inc. (SQ - Free Report) has an Earnings ESP of +1.05% and a Zacks Rank of 3, presently.

AXOS Financial, Inc. (AX - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank #2 at present.

 

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