NEW YORK (AP) — Shares of Global Payments jumped 6 percent Wednesday after it beat out Wall Street expectations for the second quarter and raised its outlook.
THE SPARK: The electronic payments processor on Tuesday said that earnings climbed 15 percent to almost $70.2 million, or 89 cents per share. Adjusted earnings were 93 cents per share. Profits and revenue outpaced what analysts polled by FactSet.
Global Payments now expects adjusted earnings between $3.61 and $3.68 per share for the year, up from its previous forecast of $3.59 to $3.66. Some analysts called even the upped guidance conservative. Wall Street predicts earnings of $3.64 per share.
THE ANALYSIS: Greg Smith of Sterne, Agee & Leach said that part of the surprisingly strong performance was led by Europe. Smith believes that the company's revised full-year earnings forecast may still be too conservative, as it does not fully account for the $413 million Accelerated Payment Technologies acquisition or include buybacks.
Smith kept the company as one of his top picks and maintained a "Buy" rating and price target of $55.
Susquehanna Financial Group's James Friedman said that Global Payments benefited from an improved operating margin and lower tax rate. Within the European region, Friedman noted exceptionally strong trends the U.K. and Russia.
Friedman reaffirmed a "Neutral" rating and $46 price target.
SHARE ACTION: Global Payments Inc. climbed $2.73 to $48.80 in afternoon trading. The shares have traded in a 52-week range of $39.37 to $53.93.