Will Global Payments' (GPN) Q3 Earnings Beat Estimates?

Global Payments Inc. GPN is slated to report third-quarter 2020 results on Oct 29, before market open.

In the last reported quarter, the company’s earnings of $1.31 per share beat the Zacks Consensus Estimate by 14.91%. However, the bottom line was down 13% year over year.

Factors Likely to Impact Q3 Results

In the company’s Merchant segment (which accounted for 62% of the company’s total revenues in the first six months of 2020), revenues are likely to have been driven by accelerating demand for its differentiated omni-channel solutions as customers are quickly implementing online ordering and virtual payment solutions in response to changing consumer preferences. Also, demand for its product and services is picking up in several international markets.

Revenue results from Merchant Solutions segment are likely to reflect additional revenues from the acquired operations of Total System. The company is likely to see an improvement in its financial results for the to be reported quarter as certain state and local governments in the United States and abroad began to gradually ease restrictions and consumer spending began to slowly increase.

The company’s Business and Consumer Solutions  is likely to have gained from continuing growth in active accounts.

Revenues from Issuer Solutions segment are expected to have gained from higher accounts on file. The company might have reaped revenue benefits  owing to higher transaction volumes, particularly related to the processing of commercial cards as COVID-19-induced restrictions  were lifted  gradually.

Additionally, operating expenses might have risen due to higher acquisition and integration expenses.

Q3 Earnings and Revenue Estimates

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.65, indicating a decrease of 2.94% from the year-ago quarter’s reported figure. The consensus mark for revenues stands at $1.72 billion, suggesting 31.9% growth from the year-earlier quarter’s reported number.

Earnings Surprise History

The company’s bottom line surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 5.79%.

Global Payments Inc. Price and EPS Surprise Global Payments Inc. Price and EPS Surprise

Global Payments Inc. price-eps-surprise | Global Payments Inc. Quote

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Global Payments this time around. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Global Payments has an Earnings ESP of +1.29%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

Zacks Rank: Global Payments carries a Zacks Rank #3, currently.

Other Stocks to Consider

Some other stocks worth considering from the finance sector with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Visa Inc. V has an Earnings ESP of +0.30% and a Zacks Rank of 3, currently.

PayPal Holdings, Inc. PYPL has an Earnings ESP of +1.14% and is Zacks #3 Ranked, currently.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Mastercard Inc. MA has an Earnings ESP of +2.26% and is a #3 Ranked player at present.

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Mastercard Incorporated (MA): Free Stock Analysis Report
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PayPal Holdings, Inc. (PYPL): Free Stock Analysis 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.

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