Global Payments Inc. GPN second-quarter 2020 earnings of $1.31 per share beat the Zacks Consensus Estimate by 14.91%. However, the bottom line was down 13% year over year.
Adjusted net revenues declined 14% year over year to $1.521 billion but the top line surpassed the Zacks Consensus Estimate of $1.41 billion.
Adjusted operating margin was 37%, down 40 basis points year over year.
Merchant Solutions: Adjusted revenues of $905.7 million decreased 21.3% year over year. Operating income of $371.5 million fell 28.8% year over year.
Issuer Solutions: Adjusted net revenues plus network fees of $414 million dipped 5.4% year over year. Operating income of $177.1 million increased 11.3% year over year.
Business and Consumer Solution: This segment was formed after the acquisition of Total System. It reported adjusted net revenues plus network fees of $216.7 million, up 10.5% year over year. Operating income was $70.1 million, up 45.4% year over year.
Balance Sheet Position (as of Jun 30, 2020)
Total cash and cash equivalents were $1.83 billion, up 8.8% from the level as of Dec 31, 2019.
Long-term debt was $8.4 billion, down 7.2% from the level at 2019 end.
Net cash provided by operating activities for the first six months was $960.3 million, up 288% year over year.
The company approved a dividend of 19.5 cents per share, payable Sep 24, 2020 to its shareholders of record as of Sep 10.
The company forged a relationship with Amazon Web Services (AWS) to be its preferred cloud provider for its issuer business.
The company also expanded its alliance with the long-standing partner CaixaBank by agreeing to meaningfully increase its ownership in their joint venture as well as extend their partnership through 2040.
The company also undertook cost-control initiatives via which it expects to deliver an incremental $400 million of savings over the next 12 months.
Zacks Rank and Performances of Other Industry Players
Global Payments carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other companies in the same space that already reported June-quarter earnings so far, the bottom-line results of Mastercard Incorporated MA, American Express Co. AXP and Visa Inc. V beat the respective Zacks Consensus Estimate by 18.26%, 123.1% and 3.92%, respectively.
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