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Total System Services Increases Sales but Misses Revenue Estimate

Wednesday - 4/24/2013, 2:00am  ET

Total System Services reported earnings on April 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Total System Services missed estimates on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share grew. GAAP earnings per share didn't move.

Gross margins increased, operating margins contracted, net margins expanded.

Revenue details
Total System Services reported revenue of $465.0 million. The 12 analysts polled by S&P Capital IQ expected to see a top line of $477.8 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.33. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.33 per share. Non-GAAP EPS of $0.33 for Q1 were 10% higher than the prior-year quarter's $0.30 per share. GAAP EPS of $0.30 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 31.1%, 10 basis points better than the prior-year quarter. Operating margin was 16.9%, 150 basis points worse than the prior-year quarter. Net margin was 12.3%, 10 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $486.0 million. On the bottom line, the average EPS estimate is $0.36.

Next year's average estimate for revenue is $2.01 billion. The average EPS estimate is $1.46.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 182 members out of 197 rating the stock outperform, and 15 members rating it underperform. Among 67 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 64 give Total System Services a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Total System Services is outperform, with an average price target of $25.32.

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This article was originally published as Total System Services Increases Sales but Misses Revenue Estimateon Fool.com

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