Earnings Preview: Global Payments

Global Payments (GPN) is expected to report Q4 earnings after market close Thursday, July 24, with a conference call scheduled for 5:00 p.m. ET.

Guidance

The consensus estimate is 51c for EPS and $327.69M for revenue, according to First Call. Guidance for the quarter calls for a range of 49c to 52c.

Analyst Views

Barrington, estimating 50c, believes the quarter should fall within a range of 50c to 51c. They anticipate that stabilization in the pricing environment for Mexican money transfer operations that became evident during Q3 should continue in Q4. Barrington says FY08 will mark the end of a transition year for the company due to investments in the HSBC joint venture in the Pac Rim for growth initiatives, as well as investments in the company's new G2 technology platform, coupled with a challenging environment for Money Transfer operations. They believe the JV with HSBC will add significant growth for Global Payments and firmly establish the company in the U.K. providing a footprint for additional opportunities on the European continent. Wachovia doesn't expect many surprises for Q4 and believes investor interest will primarily be on FY09 guidance, in particular operating margin guidance.

After nearly two years of negative margin guidance, Wachovia thinks it's possible and maybe even probable that management would slightly hedge its guidance with a +/- range of 50bps, and they continue to believe FY09 will prove to be a better year for margins.

Looking forward: Annual guidance from the company calls for EPS within a range of $1.95 to $1.97.

Comments

[George Bows...:]

I have had my eye on this company, and the sector it is in for a while. They seem to be the only "recession proof" type of entity as electronic business and consumer transactions are growing and predicted to continue growing. I wonder if anyone has a "high price" stock target.

2008 Jul 24 02:42 PM