Total System Services Inc.
(
TSS
) recently extended its long-standing agreement with the
Royal Bank of Scotland
(
RBS
). Under the terms of the new agreement, the bank will continue
providing payment processing and related services to customers in
United Kingdom, Ireland and in the United States.
RBS has been a constant support to Total System since its entry
in the European market over a decade ago. Together they manage more
than 50 million accounts across 35 European clients.
The International Services segment of Total System accounts for
21% of the company's clients present in Europe, India, Middle East,
Africa, Asia Pacific and Brazil. This alliance primarily helps the
company to deliver enhanced services to its European clients,
thereby boosting the segment's operating results.
Total System has been in an expansion spree for quite some time
now. The company recently expanded its merchant acquiring services
by extending its long-term alliances with the First Hawaiian Bank
to boost its business portfolio and drive top-line growth. The
company also struck a deal with the US-based Veracity Payment
Solutions to continue offering card payment solutions. Total System
kick-started its first quarter by collaborating with privately-held
Pivotal Systems to offer authorization, settlement and dispute
resolution services.
These alliances are in sync with the company's outlook for 2012,
wherein Total System intends to increase its total revenue by 2%
and operating earnings in the range of 8-12%. The company is
expected to release its first quarter results today after the
closing bell. The Zacks Consensus Estimate for Total System stands
at 30 cents per share compared with 25 cents per share in the
year-ago quarter, reflecting a growth of 19.4%.
Total System competes closely with
Alliance Data Systems Corporation
(
ADS
). Alliance, too, recently went in for expansion in the Brazilian
market to bring their services further in to the interiors of Sao
Paolo.
We retain our long term Neutral recommendation on Total System.
The quantitative Zacks #3 Rank (short-term Hold rating) for the
company indicates no clear directional pressure on the stock over
the near term.
ALLIANCE DATA (
ADS
): Free Stock Analysis Report
ROYAL BK SC-ADR (
RBS
): Free Stock Analysis Report
TOTAL SYS SVC (
TSS
): Free Stock Analysis Report
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