Global Payments Inc. announced results for its third quarter ended February 28, 2007. For the third quarter, revenue grew 16 percent to $260.4 million compared to $225.2 million in the prior year. Excluding the impact of current period stock option expense, diluted earnings per share grew 22 percent to $0.44 compared to $0.36 in the prior year quarter.
For the nine months ended February 28, 2007, revenue grew 17 percent to $781.4 million compared to $669.3 million in the prior year period. Excluding the impact of current period stock option expense and prior year restructuring charges, diluted earnings per share grew 27 percent to $1.43 from $1.13 in the prior year period.
In accordance with GAAP, year-to-date prior period diluted earnings per share include certain restructuring charges (see attached reconciliation schedule) relating to an operating center consolidation, which was announced in July 2005. Additionally, both the current quarter and year-to-date periods include the recognition of stock option expenses as a result of the company’s June 1, 2006 adoption of Statement of Financial Accounting Standards No. 123(R) using the modified prospective method. For the three and nine months ended February 28, 2007, GAAP diluted earnings per share were $0.42 and $1.34, respectively, compared to $0.36 and $1.12, respectively, in the prior year periods.
Comments and Outlook
Chairman, President and CEO, Paul R. Garcia, stated, “Our merchant services segment delivered solid financial results for our fiscal 2007 third quarter. This segment’s revenue growth was primarily driven by expansion in our domestic ISO channel, as well as the favorable impact from our July 2006 addition of our Asia-Pacific joint venture with HSBC. Additionally, our merchant services results benefited from certain card association incentives relating to various programs implemented in our Canadian channel, as anticipated. Finally, our consumer money transfer segment met our near-term expectations, which reflect the continued unfavorable impact of a competitive domestic pricing environment and the year-over-year impact of strong results in our prior year quarter.”
“Based on our results, we are updating our annual fiscal 2007 revenue guidance to a range of $1,050 million to $1,057 million. This revenue guidance reflects an expected 16 percent growth versus $908 million in fiscal 2006. In addition, we are updating our annual fiscal 2007 diluted earnings per share guidance to a range of $1.85 to $1.87, excluding the impact of stock option expenses as a result of our adoption of FAS 123R, for an expected growth of 20 percent to 21 percent versus $1.54 in fiscal 2006. (1) Including the impact of these stock option expenses, our annual fiscal 2007 diluted earnings per share guidance is $1.74 to $1.76. These earnings per share ranges also exclude the impact of potential restructuring and other charges,” said Garcia.
Global Payments Inc. (NYSE: GPN) is a leading provider of electronic transaction processing services for consumers, merchants, Independent Sales Organizations (ISOs), financial institutions, government agencies and multi- national corporations located throughout the United States, Canada, Latin America, Europe and the Asia-Pacific. Global Payments offers a comprehensive line of processing solutions for credit and debit cards, business-to-business purchasing cards, gift cards, electronic check conversion and check guarantee, verification and recovery including electronic check services, as well as terminal management. The company also provides consumer money transfer services from the U.S. and Europe to destinations in Latin America, Morocco and the Philippines. For more information about the company and its services, visit www.globalpaymentsinc.com.
(1) Fiscal 2006 diluted earnings per share was $1.53 on a GAAP basis, which includes restructuring charges equivalent to $0.01 in diluted earnings per share.
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