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; email@example.com