Global Payments Profit Up 39%, Lifts Outlook; Names Jeffrey Sloan CEO

(RTTNews) - Global Payments Inc. (GPNB) Tuesday reported a near 39 percent jump in first-quarter profit, mainly on demand for its services in North America and Europe. The results topped Wall Street estimates.

The company lifted its earnings outlook for 2014 by five cents, but kept its revenue expectations unchanged.

Global Payments said its President Jeffrey Sloan will also serve as its chief executive officer, effective immediately. Sloan replaces Paul Garcia, who has been CEO since 1999. Garcia will continue in the role of chairman.

The company also announced a $100 million accelerated stock repurchase plan, as part of its program to repurchase up to $250 million of its common stock.

Shares of the company gained over 5 percent in after-hours trade on the New York Stock Exchange.

Global Payments provides electronic transaction processing services for merchants and financial institutions, among others. It acts as a mediator between merchants who accept credit cards and financial services companies like Visa (V) and MasterCard (MA).

While Global Payments has been posting strong growth, it still has to contend with rivalry from eBay's (EBAY) PayPal unit and the privately held Square Inc.

In its first quarter, Atlanta, Georgia-based Global Payments posted net income of $64.6 million or $0.87 per share, compared with $46.7 million or $0.59 per share last year.

Excluding certain items, cash earnings for the quarter were $74 million or $1.00 per share, compared with $69 million or $0.87 per share a year ago. On average, 30 analysts polled by Thomson Reuters estimated earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter climbed 7 percent to $630 million from $590 million in the prior year. Twenty-six analysts had a consensus revenue estimate of $623.79 million for the quarter.

Merchant services revenue from its key U.S. region grew 5.2 percent. Canada was up 7 percent and Europe gained 11.5 percent. Asia Pacific edged up 2.8 percent.

For fiscal 2014, Global Payments raised its outlook by five cents and now expect net earnings in the range of $3.40 to $3.47 per share and cash earnings of $3.98 to $4.05 per share. Revenue is still expected in the range of $2.51 billion to $2.56 billion.

Analysts currently expect earnings of $3.94 per share on revenue of $2.52 billion for 2014.

Meanwhile, commenting on its executive change, Global Payments said it is hoping to continue its strong run under new CEO Jeffrey Sloan, who has been responsible for the Americas' businesses and global acquisition strategy. Sloan who joined the company in 2010 subsequently assumed additional tasks for worldwide operations, risk management and customer care.

Sloan earlier spent 12 years at Goldman, Sachs & Co. and was mainly responsible for developing the firm's worldwide payments practice in investment banking.

Global Payments stock closed Tuesday's regular trade at $50.69, down $0.39 or 0.76%, on a volume of 1.5 million shares. In after hours, the stock gained $2.26 or 4.46% at $52.96. The stock has trended in a 52-week range of $41.01 - $51.45.