Total System Services Inc. Earnings: Revenue Increase Helps Margin, Net Income Climbs

S&P 500 (NYSE:SPY) component Total System Services Inc. (NYSE:TSS) reported its results for the first 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 First Quarter

Results: Net income for Total System Services Inc. rose to $56.4 million (30 cents per share) vs. $48.8 million (25 cents per share) in the same quarter a year earlier. This marks a rise of 15.6% from the year-earlier quarter.

Revenue: Rose 7.4% to $461.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Total System Services Inc. fell in line with the mean analyst estimate of 30 cents per share. It beat the average revenue estimate of $423.7 million.

Quoting Management: “Our first quarter results continue to benefit from strong same client transaction growth, which was 14.4% in our card issuer processing business, when compared to last year. POS transactions, excluding deconverted clients in our indirect business, were up 11% and sales volume from our direct merchant business was up 20.9% over same quarter last year. Operating income was $84.8 million, resulting in an increase of 16.2% over last year. Our consolidated organic revenue growth of 7.7% for the quarter was the main driver in our results. This quarter represents the 8th consecutive quarter that we reported positive year-over-year growth in revenues before reimbursable items,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

Key Stats:

The comapny has now seen its net income increase for four quarters in a row. In the fourth quarter of the last fiscal year, net income rose 26.9% while the figure climbed 27.1% in the third quarter of the last fiscal year and 8.1% in the second quarter of the last fiscal year from the year earlier.

Revenue has increased for four quarters in a row. Revenue increased 7.3% to $472.2 million in the fourth quarter of the last fiscal year. The figure rose 6.1% in the third quarter of the last fiscal year from the year earlier and climbed 3.2% in the second quarter of the last fiscal year from the year-ago quarter.

The company has met estimates for two consecutive quarters. It reported net income of 31 cents in the fourth quarter of the last fiscal year.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past month, the average estimate for the second quarter has gone up from 31 cents per share to 32 cents. At $1.28 per share, the average estimate for the fiscal year has risen from $1.27 sixty days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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