Heartland Payment Systems Earnings: Here’s Why Investors are Not Excited Now

Heartland Payment Systems, Inc. (NYSE:HPY) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1.3%.

Heartland Payment Systems, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 40.91% to $0.62 in the quarter versus EPS of $0.44 in the year-earlier quarter.

Revenue: Decreased 71.13% to $149.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Heartland Payment Systems, Inc. reported adjusted EPS income of $0.62 per share. By that measure, the company beat the mean analyst estimate of $0.50. It missed the average revenue estimate of $151.61 million.

Quoting Management: Robert Carr, Chairman and CEO, commented, “Record earnings in the second quarter clearly demonstrate that our strategy to productively grow our sales organization, selectively enhance our core transaction processing capability, and add complementary non-card products to our portfolio is generating double-digit growth in net revenue and operating income. New business continues to gain momentum, as new margin installed grew 16% in the quarter, with new card margin installed growing faster than overall new margin installed. Pricing on new card merchants installed remains attractive, with June being the best month of new card margin installed in nearly five years. Productivity in our sales organization also improved to record levels, and for the second consecutive quarter, we grew the sales organization, achieving net growth of 42 relationship managers. We also achieved improved margins while investing in a variety of growth initiatives. The investments we continue to make across the organization are not only strengthening our performance today, but are positioning us for continued growth over the long term.”

Key Stats (on next page)…

EPS increased 51.22% from $0.41 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.57 and has not changed. For the current year, the average estimate is a profit of $1.94, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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