(TSS) - Total System Services, Inc - obliterated the Street’s fourth-quarter earnings estimate of 24 cents by 83.3%

Total System Services, Inc. (TSS) is a Zacks #1 Rank stock that has either matched or beat the consensus earnings estimate for the past 16 quarters. The company recently reported impressive results for both the fourth quarter and the full year. TSS has a current dividend yield of 0.94% and a five-year average dividend yield of 0.68%. The company’s return on equity nearly doubles that of the industry average—20% compared to 11%. Full Analysis Total System Services, Inc. provides electronic payment processing and related services to financial and non-financial institutions throughout the United States, Canada, Mexico, Honduras, Puerto Rico and Europe. TSS topped analysts’ earnings expectations over the past three quarters by an average margin of 31.5%. The company has succeeded in either meeting or beating the consensus earnings estimate for the past 16 quarters. Earnings per share grew 16.0% over the past five years. On Jan 16, TSS obliterated the Street’s fourth-quarter earnings estimate of 24 cents by 83.3% when it reported profits of 44 cents per share. Compared to earnings of 25 cents in the fourth quarter of last year, the result ballooned 76.0%. Revenues increased nearly 19.8% to $503.9 million from $420.7 million in the prior-year period. For the entire year, profits came in at $249.2 million, versus $194.5 million last year. Revenues jumped 11.9% to $1.79 billion from $1.60 billion in 2005. The company increased revenues and grew profits for the past 10 years. Chairman and CEO Philip W. Tomlinson stated, “We exceeded our goals for 2006 with another record year and we are pleased to announce an improvement in our guidance for 2007, which is a direct result of the TSYS team approach of focusing on our growth strategy while streamlining costs.” TSS now expects fiscal 2007 profits to decline only 3% to 5% year-over-year. Previously, the company anticipated a sharper drop of between 7% and 9%. The guidance includes a one-time contract-termination fee of about $68.9 million and the acceleration of amortization of contract acquisition costs of around $6 million. Taking these items out of the equation, profits should grow between 14% and 17%, versus the company’s previous forecast for 8% to 10% growth. Analysts responded to the company’s bullish guidance by raising their earnings estimates. The consensus estimate for this year jumped two cents to $1.18 over the past week. Profit forecasts for next year rose three cents to $1.32 over the same period of time. Earnings per share are projected to grow 13.0% over the next 3-5 years. On Nov 21, the Board of Directors declared a quarterly cash dividend of seven cents per share. The company has a current dividend yield of 0.94% and a five-year average dividend yield of 0.68%. TSS’s return on equity nearly doubles that of the industry average—20% compared to 11%. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home