Global Payments Inc. (NYSE:GPN) filed Quarterly Report for the period ended 2011-08-31.
Global Payments Inc. has a market cap of $3.45 billion; its shares were traded at around $42.96 with a P/E ratio of 14.5 and P/S ratio of 1.9. The dividend yield of Global Payments Inc. stocks is 0.2%. Global Payments Inc. had an annual average earning growth of 14.3% over the past 10 years. GuruFocus rated Global Payments Inc. the business predictability rank of 4-star.
Highlight of Business Operations:We grow our United States revenue by adding small and mid-market merchants in diversified vertical markets, primarily through our ISO channel. For the three months ended August 31, 2011, our United States direct credit and debit card processed transactions grew 12%, and our total United States revenue grew 12% compared to the prior year period. For the three months ended August 31, 2011 compared to the prior year s comparable period, our United States average ticket decreased approximately 3% which was offset by increased spreads. This decline in average ticket is primarily due to a shift toward smaller merchants added through our ISO channel. Smaller merchants tend to have lower average tickets than larger merchants. The effect of consumers replacing cash-based payments with debit card transactions also lowers our overall average ticket amounts. Based on our mix of merchants, slightly more than half of our United States transactions are comprised of a combination of signature- and PIN-based debit transactions, with PIN-based debit transactions representing less than 10% of our total transactions.
Our effective tax rates were 32.7% and 31.7% for the three months ended August 31, 2011 and 2010, respectively. The effective tax rates for the three months ended August 31, 2011 and 2010 reflect adjustments to our UK deferred tax asset due to legislated enacted corporate tax rate reductions in the United Kingdom of 2% and 1%, respectively.
Operating income in the North America merchant services segment increased 5% to $71.8 million for the three months ended August 31, 2011 compared to the prior year s comparable period. The operating margin was 19.0% and 20.3% for the three months ended August 31, 2011 and 2010, respectively. Growth in the U.S. ISO channel reduced margins for the three months ended August 31, 2011. The ISO channel generally has a dilutive effect on our operating margin compared to our other channels due to the ongoing commission payments to the ISOs.
Operating income in the International merchant services segment increased 77% to $55.7 million for the three months ended August 31, 2011 compared to the prior year s comparable period. The operating margin was 33.9% and 30.4% for the three months ended August 31, 2011 and 2010, respectively. The increase in operating margin is due to the strong segment results, a marketing fee true-up in Spain and favorable currency trends.
During the quarter ended August 31, 2011 the maximum and average borrowings under our credit facilities were $708.9 million and $451.9 million, respectively. The weighted average interest rates on these borrowings were 1.85% and 1.72%, respectively. Our maximum borrowed amount was greater than our average and period end borrowings due to share repurchases and the timing of settlement funding.
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