The revenue engine cranked into high gear at TSYS in the second quarter, with the credit-card and payment processor on Tuesday reporting a profit of $115 million, a 65 percent increase from the same April-June period of 2016. The profit a year ago was $69.7 million.
The publicly traded company, headquartered in Columbus, posted the profit, or net income, on total revenues of $1.22 billion in the quarter, which was up just over 6 percent from $1.15 billion in the same three months a year ago.
Diluted earnings per share came in at 62 cents, up nearly 65 percent from 38 cents-per-share the same period of 2016.
“Our second quarter results were outstanding, driven by solid revenue growth that converted into very strong operating income and diluted earnings per share (EPS),” TSYS Chairman and Chief Executive Officer Troy Woods said in a statement accompanying the earnings report.
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“These results are all organic as this is the first quarter that the TransFirst acquisition is in both quarters reflecting the execution of our strategic goals,” the CEO said. “With our strong cash flow, we reduced our debt another $125 million during the quarter, bringing our year-to-date reduction to $225 million. We are also pleased to announce that we are increasing our quarterly dividend by 30 percent to 13 (cents) per share from 10 (cents) per share and raising our revenue and EPS guidance.”
Tuesday’s report from TSYS comes with its stock price steadily moving higher into uncharted territory, reaching successive all-time highs amid an overall rising stock market environment. That was the case again Tuesday, with shares touching $62.93 in early trading on the New York Stock Exchange, up from Monday’s close of $62.62 per share.
Highlights in the quarter include the addition of about 10 million new traditional credit-card and payment accounts on file, which brought the firm’s total to 542 million, which is up more than 8 percent from a year ago and marks an all-time high in traditional accounts on file.
TSYS also noted it reached the first-year anniversary of its $2.35 billion purchase of Hauppauge, N.Y.-based TransFirst, a merchant processing company that has been folded into its own Merchant Segment. The combined operation surpassed $100 million in operating income, the first time that business income has topped that level.
The Columbus company did report a 13-percent quarterly drop in the category of sales, general and administrative expenses, which are related to the TransFirst merger and its subsequent transition into the existing merchant operation at TSYS. The reduced expenses, which contributed to the higher profit number, fell from $173.8 million to $151.2 million.
TSYS also noted Tuesday that its Austin, Texas-based NetSpend prepaid card business has added pharmacy retailer Walgreens as a distributor, bringing the total locations and employers offering or using the cards to more than 110,000. It also said United Airlines officially launched a new affinity card serviced by NetSpend last week.
For stock investors, the company said its board of directors has approved a quarterly dividend of 13 cents per share, up 30 percent from 10 cents per in the previous quarter. The dividend is payable Oct. 2 to those owning TSYS shares at the end of the day on Sept. 21.
Looking ahead, TSYS on Tuesday said it has revised its full-year 2017 financial guidance upward. The firm said it now expects total revenues to be in the range of $4.8 billion to nearly $4.9 billion for the full 12 months, which would be an increase of between 15 percent and 17 percent.
Diluted earnings per share, according to the guidance outlook, should come in between $2.30 and $2.38, which is a range of 33 percent to 37 percent higher.
TSYS: THE FIRST SIX MONTHS
▪ Total revenues: $2.4 billion, up 27.3 percent from $1.9 billion in the same January-June period of 2016
▪ Net income or profit: $220.9 million, up 37.8 percent from $160.3 million in the same January-June period a year ago
▪ Diluted earnings per share: $1.19, up 37.2 percent from 87 cents in the same January-June period a year ago