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Alliance Data's (ADS) Q4 Core Earnings Improve Y/Y

Have you been eager to see how Alliance Data Systems CorporationADS , a global provider of data-driven marketing and loyalty solutions, performed in Q4 in comparison with the market expectations? Let's quickly scan through the key facts from this Plano, TX -based company's earnings release this morning:

Earnings Improve

Alliance Data reported core earnings attributable to stockholders of $4.67 per share, up 13% year over year. The Zacks Consensus Estimate was $4.41.

Results were primarily aided by increased revenues.

How Was the Estimate Revision Trend?

You should note that the earnings estimate for Alliance Data depicted neutral stance prior to the earnings release. The Zacks Consensus Estimate remained unchanged at $4.41 over the last 7days.

Also, Alliance Data has a decent earnings surprise history. The company delivered positive surprises in three of the trailing four quarters.

Alliance Data Systems Corporation Price and EPS Surprise

Alliance Data Systems Corporation Price and EPS Surprise | Alliance Data Systems Corporation Quote

Overall, the company surpassed the Zacks Consensus Estimate by an average of 3.3% in the trailing four quarters.

Revenue Rise

Alliance Data's revenues of $1.83 billion increased 4% year over year. The Zacks Consensus Estimate was $1.94 billion.

Key Takeaways

Adjusted EBITDA increased 12% year over year to $566 million in the reported quarter.

In credit card business, average receivables increased 22% year over year to $15.3 billion in the quarter.

AIR MILES' reward miles issued decreased 3% while reward miles redeemed increased a whopping 173%.

For 2017, the company expects revenue of $7.7 billion and core EPS of $18.50.

Ed Heffernan, president and chief executive officer of Alliance Data, noted, "We were surprised and disappointed with the enactment of new legislation in Ontario that now prohibits the time-based expiration of reward points associated with all loyalty programs. The cancellation of our 5-year expiration policy necessitated a change in our breakage estimate, creating a one-time charge recorded as a reduction of revenue in the fourth quarter of 2016. Going forward, we will need to rework the AIR MILES Reward Program to replace the lost economics while maintaining a viable value proposition for collectors engaged in the program."

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for Alliance Data. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. Now it all depends on what sense the just-released report makes to the analysts.

Check back later for our full write up on this Alliance Data earnings report!

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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