Total System Services, Inc. Earnings Cheat Sheet: Four Quarters in a Row of Declining Profit Now Snapped

S&P 500 (NYSE:SPY) component Total System Services, Inc. (NYSE:TSS) reported its results for the second quarter. Total System Services Inc. is a payment solutions provider company. It offers electronic payment processing, merchant services and related services to financial and non-financial institutions globally.

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Total System Services Earnings Cheat Sheet for the Second Quarter

Results: Net income for Total System Services, Inc. rose to $53.7 million (28 cents per share) vs. $49.7 million (25 cents per share) in the same quarter a year earlier. This marks a rise of 8.1% from the year earlier quarter.

Revenue: Rose 3.2% to $447.6 million from the year earlier quarter.

Actual vs. Wall St. Expectations: TSS beat the mean analyst estimate of 27 cents per share. It beat the average revenue estimate of $437.2 million.

Quoting Management: “We continue to see the improvements that we expected in 2011 as evidenced by our year over year quarterly revenue growth with and without the termination fee. Our North America Services segment had an increase in revenues before reimbursable items of 3.2% and operating income growth of 13.0% excluding the 2010 termination fee. In our International Services segment, revenues before reimbursable items increased 14.1% on a constant currency basis as a result of new business and organic growth. Our Merchant Services segment had an increase in revenues before reimbursable items of 1.3% and operating income growth of 10.0%,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

Key Stats:

Last quarter’s profit increase breaks a streak of four consecutive quarters of year-over-year profit drops. In the first quarter, net income fell 4.9% from the year earlier, while the figure fell 21.7% in the fourth quarter of the last fiscal year, 16.9% in the third quarter of the last fiscal year and 7% in the second quarter of the last fiscal year.

Gross margin shrank 0.9 percentage point to 30.3%. The contraction appeared to be driven by increased costs, which rose 4.5% from the year earlier quarter while revenue rose 3.2%.

Revenue has risen the past four quarters. Revenue increased 3.4% to $429.4 million in the first quarter. The figure rose 1.2% in the fourth quarter of the last fiscal year from the year earlier and climbed 0.2% in the third quarter of the last fiscal year from the year-ago quarter.

The company beat estimates last quarter after being in line with expectations in the first quarter with net income of 25 cents per share.

Competitors to Watch: Visa Inc. (NYSE:V), Fidelity National Information Services (NYSE:FIS), MasterCard Incorporated (NYSE:MA), Cass Information Systems (NASDAQ:CASS), NetSpend Holdings Inc (NASDAQ:NTSP), Fiserv, Inc. (NASDAQ:FISV), MoneyGram Intl., Inc. (NYSE:MGI), ACI Worldwide Inc (NASDAQ:ACIW), Banks.com Inc (AMEX:BNX), and Intl. Business Machines Corp. (NYSE:IBM).

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(Source: Xignite Financials)

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