Total System Services Inc. Earnings Cheat Sheet: Profit Rises for Second Straight Quarter

S&P 500 (NYSE:SPY) component Total System Services Inc. (NYSE:TSS) reported its results for the third quarter. Total System Services is a payment solutions provider company. The company 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 Third Quarter

Results: Net income for Total System Services Inc. rose to $58.1 million (30 cents per share) vs. $45.7 million (23 cents per share) in the same quarter a year earlier. This marks a rise of 27.1% from the year earlier quarter.

Revenue: Rose 6.1% to $459.7 million from the year earlier quarter.

Actual vs. Wall St. Expectations: TSS beat the mean analyst estimate of 29 cents per share. Analysts were expecting revenue of $456.3 million.

Quoting Management: Given the resiliency of the card market, the increase in transactions, addition of new accounts from our sales pipeline and associated fees, we are raising our revenue guidance to a range of 4% to 5% for total revenues and 5% to 6% for revenues before reimbursable items. As a result of improved operations, lower effective tax rates and share repurchases, which are partially offset by negative currency impact, we are raising our guidance for income from continuing operations to a range of $219 to $221 million, and our EPS guidance to a range of $1.14 to $1.15,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

Key Stats:

Revenue has risen the past four quarters. Revenue increased 3.2% to $447.6 million in the second quarter. The figure rose 3.4% in the first quarter from the year earlier and climbed 1.2% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 28 cents versus a mean estimate of net income of 27 cents per share.

While the company has been profitable for the last nine quarters, income has fallen year over year by an average of 1.6% over the past five quarters. The quarter hit the hardest was the fourth quarter of the last fiscal year, that saw a 21.7% drop.

The company’s cost of sales rose 6.2% from a year earlier. Last quarter, cost of sales was 69.9% of revenue, similar to a year earlier.

Looking Forward: The average estimate for the fourth quarter remains unchanged at 30 cents a share. For the fiscal year, the average estimate has moved down from $1.12 a share to $1.11 over the last sixty days.

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), Inc (AMEX:BNX), and Intl. Business Machines Corp. (NYSE:IBM).

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(Source: Xignite Financials)