The TSYS credit-card and payment machine, firing on virtually all cylinders, resulted in a profit of $77.8 million in the first quarter, an increase of nearly 58 percent from $49.3 million in the same period of 2014.
For investors, that translated to earnings per share of 42 cents, a 60 percent boost from 26 cents per share in the quarter a year ago. That was seven pennies above the 35 cents per share Wall Street analysts surveyed by Thomson Financial had been expecting from the global high-tech firm.
Troy Woods, TSYS chairman, chief executive officer and president, in delivering the earnings report Tuesday, said he was “thrilled with our execution and financial performance” during the quarter.
He said the Columbus-based company experienced record card transactions, authorizations, volumes and accounts on file in the January-March period.
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The effort was punctuated with the completion of a two-year project to bring on new business from Bank of America. In mid-first quarter the conversion of the bank’s consumer card portfolio was converted to the company’s TS2 processing system.
“It was the largest credit-card conversion in the history of payments. No one has ever converted as many accounts as we did for one customer in one weekend like we did back in the first quarter,” Woods said in an interview following the TSYS annual shareholder meeting Tuesday morning.
He declined to say how many accounts that included, citing client sensitivity. But the company’s “retail consumer” accounts on file total reported in the first quarter came in at 392.8 million. That’s up from 298.4 million accounts at the end of December, a difference of just over 94 million accounts.
In the conference call, Woods said the Bank of America processing activity, along with strong growth from existing customers, pushed quarterly transaction volume at TSYS to a record-setting level of 3.3 billion. It marks the third straight quarter record levels have been reached in that category, he noted.
“Bank of America is a great brand and franchise, and we are very excited about having their consumer business at TSYS,” Woods said on the conference call.
While BofA is big news, money poured into TSYS from most of its major revenue categories. North America Services jumped nearly 18 percent to $309.2 million. Prepaid card subsidiary NetSpend was up nearly 17 percent at $155 million. Merchant Services rose just over 5 percent to $129.1 million. International Services was down 3 percent to $79.8 million on the revenue side, but still came in with nearly $7 million in operating income.
All of the financial numbers in the report added up to total revenue in the first quarter of $662.2 million, a nearly 12 percent increase from $592.8 million in the same period a year ago.
Accounts on file for the card and payment processor at the end of March totaled 723.7 million — including the Bank of America-infused retail category — up from 556.2 million at first quarter’s end last year.
“During the quarter, we repurchased 1.45 million shares of our stock, and including dividends, we returned 73 percent of available free cash flow to our shareholders,” Woods said in the earnings release. “As a result of the great start to the year, we are revising our adjusted (earnings per share) guidance to grow between 12 percent and 14 percent from the previous range of 11 percent and 13 percent.”
On the conference call, just as he did earlier Tuesday at the annual meeting at the company’s downtown Columbus headquarters, Woods reiterated why he and management believes the journey ahead for the firm will include solid growth and more profits.
“Our scale, reach and financial strength are compelling assets,” he said. “We are committed to developing deep relationships and living to a higher purpose of putting people at the center of everything we do. We are also committed to delivering values to our customers, our team members and, especially, to our shareholders. This is what we believe sets us apart, what drives our transformation and why we’ll continue to win the marketplace.”
TSYS issued its first-quarter report after Tuesday’s close of the New York Stock Exchange, where its shares are publicly traded. However, shares did rise 16 cents, or 0.4 percent, to $38.39 for the day, which puts them less than a dollar from the 52-week trading high of $39.25 per share. The 52-week low is $28.54.