TSYS profit surges in fourth quarter; card processor reduces debt

Global credit-card and payment processor TSYS on Tuesday reported a fourth-quarter profit of just over $242 million on total revenues of nearly $1.3 billion.

The company, headquartered in downtown Columbus, saw its profit, or net income, jump a whopping 227 percent from the $73.9 million posted in the final quarter of 2016. The surge came largely from a $135.9 million tax benefit from the federal Tax Cuts and Jobs Act passed into law in late December.

Total revenues for the quarter rose 12.5 percent from the $1.13 billion the firm reported in the October-December period in 2016.

TSYS released its earnings report following the New York Stock Exchange’s closing bell on Tuesday. In trading through the day, the firm’s stock rose 17 cents to $83.92 per share, which was 3 cents off the 52-week high of $83.95 set earlier in the session. The 52-week low for the stock is $49.98 per share.

“2017 proved to be a truly exceptional year for our company,” TSYS Chairman, President and Chief Executive Officer Troy Woods said in a statement. “We delivered outstanding financial results, continued to expand our merchant business with the Cayan acquisition announcement and finished the year having met or exceeded our goals.”

For all of 2017, the technology company posted a profit of $586.2 million, which was 83.4 percent higher than the $320 million it recorded in 2016. That came on total revenues of $4.9 billion, which is an 18.2 percent increase from just under $4.2 billion for full-year 2016.

“We expect the momentum of 2017 to carry over into 2018,” Woods said. “We are projecting strong organic revenue growth as we remain laser focused on executing on our strategic plan and delivering outstanding results.”

TSYS pointed out it reduced its debt by $400 million last year and by $800 million over the last two years. The company also repurchased nearly 3.85 million shares for $282.6 million in 2017, a move that takes stock shares out of public circulation. That, in theory, makes those shares still held by investors that much more valuable.

The company also noted it has begun using a new Accounting Standards Codification for its earnings and revenue projections, called “Revenue from Contracts with Customers.” It said the guidance for 2018 includes the new standards and the anticipated impact of its $1 billion all-cash purchase of Cayan, a payment technology firm. It also includes the expected impact of the new federal tax law, as well as prepaid rules being put into effect later this year by the Consumer Financial Protection Bureau.

With that in mind, TSYS projects total revenues will be somewhere in the range of $3.85 billion to $3.95 billion for all of 2018, which would be a decline between 22 percent and 20 percent. Net revenue is projected in a range from $3.65 billion to $3.75 billion for the year, an increase of 7 percent to 10 percent.

Diluted earnings per share, meanwhile, are expected to come in between $2.85 and $2.95 per share, down between 10 percent and 7 percent. Adjusted diluted earnings are projected to be between $4.10 and $4.20 per share, which would be an increase between 22 percent and 25 percent.

TSYS, with about 11,800 employees, does business in 13 countries, with revenues totaling $4.9 billion in 2017. Just under 5,000 of those workers are in Columbus.

This story was originally published January 23, 2018 at 6:16 PM with the headline "TSYS profit surges in fourth quarter; card processor reduces debt."