Alliance Data Systems Corp. said its third-quarter net income more than doubled from a year earlier, to $69.3 million, or 99 cents a share, as revenue continued to rise and the Dallas company offset a merger-related charge from the previous year.
However, the private-label credit card unit's earnings tumbled 33%, and revenue from this line dropped 12%. The business has continued to struggle to recover from the loss of the retailer Lane Bryant as a major customer.
Despite the difficult environment, Alliance Data raised its full-year cash earnings guidance Wednesday to a range of $4.35 to $4.40 a share, versus the $4.35 estimate it had reiterated last month. It also said it expects about $2.05 billion of full-year revenue. Analysts on average had been expecting earnings of $4.37 a share on $2.1 billion of revenue, according to Thomson Reuters.
Earnings from continuing operations rose 15 cents from a year earlier, to 91 cents a share. Cash earnings rose 16 cents, to $1.22 a share, exceeding the target it affirmed last month by 7 cents. Revenue rose 4%, to $511.2 million.
Analysts on average had been expecting third-quarter cash earnings of $1.16 a share on revenue of $524 million.
In Alliance Data's loyalty services business, which operates frequent-flier programs, adjusted earnings before income taxes, depreciation, and amortization rose 38%, and revenue jumped 25%. Air miles issued and redeemed grew by double digits.
Earnings from the Epsilon Marketing unit, which provides loyalty programs for such companies as Hilton Hotels, Barnes & Noble, and Pfizer, climbed 9%, and the services unit's earnings rose 26%.