DOW JONES NEWSWIRES
Total System Services Inc.'s (TSS) fourth-quarter earnings rose
22% as the payment-services provider saw a modest revenue increase
which, though better than expected, failed to offset higher
overhead costs.
The company, which makes technologies to support consumer
finance credit and debt cards for financial institutions, predicted
earnings would be better than analysts were expecting, although its
revenue guidance fell short of views. It predicted earnings from
continuing operations of $1.09 to $1.11 on revenue of $1.75 billion
to $1.79 billion, while analysts were looking for $1.07 and $1.8
billion, respectively, according to a poll by Thomson Reuters.
In recent quarters, the company's revenue has begun to grow
again, after it struggled in the recession because of weakened
consumer spending and numerous bank failures costing it clients.
Earlier this month, Credit Suisse analysts Bryan Keane and Ashish
Sabadra said the company has "finally begun to turn the corner"
after its numerous trials during the downturn, as they upgraded
their rating on the firm.
Total System Services posted a profit of $47.2 million, or 24
cents a share, from $60.2 million, or 31 cents a share, a year
earlier. Revenue increased 1.7% to $440 million.
Analysts predicted earnings of 24 cents on revenue of $439
million.
Gross margin fell to 29.1% from 31.9%. Overhead costs increased
29%.
Total System Services shares were down a penny at $17.52 after
hours.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com