Global Payments (GPN) delays third-quarter earnings estimates

Global Payments (GPN) reported quarterly earnings of $2.48 per share, missing the Zacks Consensus Estimate of $2.49 per share. For comparison, earnings per share were $2.18 a year earlier. These numbers have been adjusted for one-off items.

This quarterly report presented an earnings surprise of -0.40%. A quarter ago, it was expected that this electronic payments processing company would post earnings of $2.36 per share when it actually produced earnings of $2.36, which was no surprise.

The company has topped consensus EPS estimates twice over the last four quarters.

Global Payments, which belongs to the Zacks Financial Transaction Services industry, posted revenues of $2.06 billion for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 0.17%. For comparison, revenues from the previous year amounted to $2 billion. The company has topped consensus revenue estimates twice over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will largely depend on management’s commentary on the earnings call.

Global Payments shares have lost about 7.3% year to date, compared with the S&P 500 Index’s decline of -18.2%.

What’s next for global payments?

While Global Payments has outperformed the market this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no simple answers to this key question, but one reliable measure that can help investors address this issue is the company’s earnings prospects. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for Global Payments is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) stock. Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $2.48 on $2.04 billion in revenue for the coming quarter and $9.39 on $8.1 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, Financial Transaction Services is currently in the bottom 32% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One more company in the same industry, Flyware (FLYW), is yet to report results for the quarter ending September 2022. The results are expected to be released on November 8.

The payments company is expected to post quarterly earnings per share of $0.06 in its upcoming report, representing a year-over-year change of -25%. The consensus EPS estimate for the quarter has not changed over the last 30 days.

Flyware’s revenue is expected to be $86.94 million, up 28.2% from the same quarter last year.

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