TSYS profits again: 5 things to know about the tech firm’s latest financial results

TSYS, the Columbus company that processes credit-card transactions across the U.S. and around the globe, reported Tuesday a fourth-quarter profit of $136.4 million, or 74 cents per diluted share.

The caveat is the profit, or net income, reflected a tax benefit received by the company from the federal Tax Cuts and Jobs Act in the fourth quarter of 2017. That took a big bite out of the firm’s most recent net income, 43.7 percent to be exact, which means the profit a year ago was $242.2 million, or $1.31 per share, before the tax benefit.

It was still a very solid October-December quarter for the company headquartered in downtown Columbus, said Troy Woods, its chairman, president and chief executive officer.

“Strong results in the fourth quarter closed out another exceptional year for our company,” Woods said. “In 2018, we delivered outstanding financial results, expanded our merchant capabilities with the acquisition of Cayan and iMobile3, and continued to make strategic long-term investments across the enterprise.”

Here are other highlights for the high-tech firm, which issued its earnings report for the fourth quarter and full-year 2018 after the stock market’s close Tuesday:

A change in the bottom line

The quarterly profit came on total revenues of $1.02 billion, which is down 20 percent because of an accounting change by TSYS effective Jan. 1, 2018. At the change’s essence, the firm began recording certain fees collected for payment networks and card issuers as “net” of amounts paid to them rather than “gross” amounts.

Performance for all of 2018

The company posted a profit of $576.6 million, or $3.14 per diluted share for the 12-month period. That was down 1.6 percent from $586.2 million in the same January-December period of 2017, which translates to $3.16 per share.

That profit came on total revenue of $4.02 billion, which was down from $4.92 billion in 2017. Again, those full-year financial numbers were influenced by the Tax Cuts and Jobs Act, as well as the accounting change.

Looking to the future and stock buybacks

TSYS said it expects full-year 2019 net revenue to rise between 5 percent and 7 percent, with adjusted diluted earnings per share to climb between 6 percent and 10 percent.

The company also bought back 2 million shares of its common stock for about $172 million during the fourth quarter. Fewer shares of stock on the open market should make those remaining in investors’ hands more valuable.

Sizing up the company’s stock

With TSYS issuing its earnings information after the closing bell of the New York Stock Exchange, current and potential investors did not yet have those financial numbers available to make decisions on buying or selling the firm’s stock.

However, its shares did fall in trading Tuesday, dipping 85 cents apiece to close at $86.98 per share, a nearly 1 percent decline. The 52-week trading results for TSYS shares range from a low of $75.58 per share to a high of $100.39 per share.

Key facts about the company

TSYS employs about 13,000 in the U.S. and abroad, doing business in 13 countries. It processed more than 32 billion transactions in 2018.