Can Global Payments Navigate Through Rising Costs in Q4 Earnings?

Global Payments Inc. GPN is set to report fourth-quarter 2024 results on Feb. 13, 2025, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $2.96 per share on revenues of $2.31 billion. See the Zacks Earnings Calendar to stay ahead of market-making news.The fourth-quarter earnings estimate has remained stable over the past 60 days. The bottom-line projection indicates a year-over-year increase of 11.7%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 5.6%. Image Source: Zacks Investment ResearchFor 2024, the Zacks Consensus Estimate for Global Payments’ revenues is pegged at $9.17 billion, implying a rise of 5.8% year over year. Also, the consensus mark for current year EPS is pegged at $11.56, implying a jump of around 10.9% on a year-over-year basis.Global Paymentsbeat the consensus estimate in three of the last four quarters and missed once, with the average surprise being 0.3%. This is depicted in the figure below.Global Payments Inc. Price and EPS Surprise Global Payments Inc. price-eps-surprise | Global Payments Inc. QuoteQ4 Earnings Whispers for GPNOur proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat, but that’s not the case here.GPN has an Earnings ESP of -0.49% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.You can see the complete list of today’s Zacks #1 Rank stocks here.What’s Shaping GPN’s Q4 Results?The Zacks Consensus Estimate for adjusted revenues from Merchant Solutions indicates a 6.7% increase from the year-ago period’s reported number of $1.67 billion, whereas our model estimates a 7.3% increase. Booking growth, new POS locations and an expanding partner network are likely to have aided the Merchant Solutions segment. The consensus mark for adjusted operating income indicates 8.3% growth from the year-ago level of $797.4 million, while our model estimate suggests an 8.7% increase.Both the consensus estimate and our model estimate for Issuer Solutions’ adjusted revenues signal a more than 3% increase from the year-ago figure of $530.6 million. A rise in traditional accounts on file and increasing transactions are likely to have aided the segment in the quarter under review. Both the consensus estimate and our model estimate for adjusted operating income from the unit indicate a rise of more than 4% in the fourth quarter from $251 million a year ago.The Zacks Consensus Estimates for revenues from Americas and Europe operations indicate 3.3% and 7.6% year-over-year increases, respectively, in the fourth quarter. The above-mentioned factors are expected to have positioned GPN for year-over-year growth.However, profit growth from the businesses is likely to have been partially offset by increased costs under certain heads in the fourth quarter. Our model expects adjusted selling, general and administrative expenses to have increased 5.2% year over year. For the upcoming quarter, we anticipate the adjusted cost of service to be around $515 million.Continuous investments to upgrade digital capabilities are likely to have increased expenditures. Adjusted total operating expenses are expected to have climbed 5.1% year over year in the fourth quarter, making an earnings beat uncertain. Also, the consensus estimate for revenues from Asia Pacific indicates a 4.6% year-over-year decline.How Did Other Stocks Perform?Here are some stocks in the broader Business Services space that have already reported earnings for this quarter: The Western Union Company WU, Fidelity National Information Services, Inc. FIS and Mastercard Incorporated MA.Western Union reported fourth-quarter 2024 adjusted EPS of 40 cents, which missed the Zacks Consensus Estimate by 4.8% due to lower contributions from the Consumer Money Transfer segment and decreased contributions from Iraq. Nevertheless, the downside was partly offset by strong performance in the retail foreign exchange business and the launch of the media network business. Additionally, a reduction in overall expenses helped support WU’s margins.Fidelity National reported fourth-quarter 2024 adjusted EPS of $1.40, which beat the Zacks Consensus Estimate by 3.7% onrobust recurring revenue growth in both its segments and new sales momentum. Improved higher-margin license revenues benefited the Capital Market Solutions segment. However, higher costs of revenues partially offset FIS’ positives.Mastercard reported fourth-quarter 2024 adjusted earnings of $3.82 per share, which surpassed the Zacks Consensus Estimate by 3.8% thanks to increased gross dollar volume, cross-border volumes, strong demand for value-added services and growth in switched transactions due to robust consumer spending. However, the upside was partly offset by escalating operating expenses and higher rebates and incentives.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mastercard Incorporated (MA): Free Stock Analysis Report Fidelity National Information Services, Inc. (FIS): Free Stock Analysis Report The Western Union Company (WU): Free Stock Analysis Report Global Payments Inc. (GPN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks