• February 4, 2023

Global Payments stock gains after profit beat, Google partnership announcement

Global Payments Inc. shares rose 2.9% in premarket trading Monday after the financial technology firm beat earnings expectations for the last quarter while announcing a partnership with Google from Alphabet Inc.

Global payments
GPN, + 0.84%
posted net income of $ 183 million, or 61 cents per share, for the fourth quarter, compared to $ 103 million, or 34 cents per share, for the year-ago quarter. On an adjusted basis, Global Payments earned $ 1.80 per share, above the $ 1.62 per share reported a year earlier and above the $ 1.76 per share forecast by analysts surveyed by FactSet had.

Fourth quarter revenue declined from $ 1.99 billion to $ 1.93 billion as analysts modeled $ 1.90 billion.

Global Payments announced in a press release that it expects annual synergies from the TSYS merger to reach at least $ 150 million by September 2022, compared to a previous estimate of $ 125 million. The company also anticipates annual run rate expense synergies of at least $ 400 million through September 2022, above an earlier estimate of $ 375 million.

The company issued a full year forecast that expected adjusted net sales of $ 7.5 billion to $ 7.6 billion and adjusted earnings of $ 7.75 to $ 8.05. Analysts tracked by FactSet modeled adjusted sales of $ 7.58 billion and a percentage of adjusted earnings of $ 8.00.

Global Payments announced that its board of directors has approved an increase in the company’s buyback authorization, bringing the total amount available to $ 1.5 billion. As part of the program, the company plans to launch an accelerated share buyback program of $ 500 million “in the coming days.”

The company also announced a strategic partnership with Alphabet’s
TogetL, -0.76%

Aco, -0.84%
Google, through which the company provides Google services for acquiring dealers and is moving a large part of its acquisition technology to the Google Cloud.

Moving to Google Cloud is expected to result in cost savings over time, said Cameron Bready, president of Global Payments, on the company’s call for profits. The companies will also undertake “joint go-to-market efforts” through cross-selling.

Global Payments stocks have risen 14% over the past three months as the S&P 500
SPX, + 0.34%
has increased by 11%.

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