July 27, 2010 / 10:16 PM / 8 years ago

UPDATE 2-Global Payments Q4 profit misses market view

* Q4 income from cont ops $0.56 vs est EPS $0.57

* Q4 rev up 16 pct to $425.1 mln

* Sees fiscal 2011 EPS $2.68-$2.77

* Sees fiscal 2011 rev $1.74 bln-$1.78 bln (Adds conference call details, background)

July 27 (Reuters) - Global Payments Inc (GPN.N), which processes online credit card transactions, posted quarterly earnings that missed analysts’ expectations partly on higher costs of services.

On a conference call with analysts, the company said its joint venture partner HSBC (0005.HK) recently received approval from Chinese regulators, which enables Global Payments to start processing transactions for China Union Pay in Beijing, as well as offer merchant acquiring services by the end of summer.

Also, the company said it will choose the most advantageous approach in Canada after it was notified last month by Canadian Imperial Bank of Commerce (CIBC) (CM.TO), that it would not renew a Visa sponsorship agreement with Global Payments at the end of its 10-year term in March 2011. [ID:nSGE65H0HT]

The company had previously said it filed an application with Canadian regulatory authorities to start a loan company in Canada, for directly processing Visa transactions in the country from March 2011.

“We will choose the most advantageous approach to ensure a timely implementation well in advance of the March 2011 conclusion of the CIBC Visa sponsorship agreement,” Chief Executive Paul Garcia said on the call.

Global Payments currently has a marketing alliance with CIBC, Canada’s No. 5 bank, to offer Visa credit and debit card payment products and services to merchants in Canada.

For the fiscal 2011, Global Payments said it expected earnings in a range of $2.68 to $2.77 a share, on revenue of between $1.74 billion and $1.78 billion.

For the fourth quarter ended May 31, net income attributable to the company was $34.2 million, or 42 cents a share, compared with $37.6 million, or 46 cents a share last year.

Global Payments reported earnings from continuing operations of 56 cents a share for the quarter.

Revenue was $425.1 million, up 16 percent from the prior-year quarter. Cost of services rose 17 percent to $152.3 million.

Analysts on average expected a profit of 57 cents a share, on revenue of $404.6 million, according to Thomson Reuters I/B/E/S.

Shares of the Atlanta-based company were up 14 cents at $40.07 in trading after the bell. They closed at $39.93 on Tuesday on the New York Stock Exchange.

For all the alerts, please double-click [ID:nASA00KCG] (Reporting by Brenton Cordeiro in Bangalore; Editing by Unnikrishnan Nair)

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