Robust performance in the U.S. independent sales organization channel and benefits from international acquisitions helped bolster Global Payments Inc.'s fiscal first-quarter results despite tough economic conditions.
The Atlanta processor reported net income of $57.8 million for the quarter, up 0.5% from the same period a year earlier. Revenue increased 8.7%, to $441.3 million.
"Macroeconomic conditions have caused our average ticket amounts to decline across all of our geographies compared to prior year, with the U.S. experiencing the greatest decline in average ticket," Paul Garcia, Global Payments' chairman and chief executive, told analysts on a conference call Thursday evening. "The U.S. trend continues to be driven by a combination of weakened consumer spending, the industry shift of increasing debit transactions and the continued addition of merchants with smaller average tickets through our ISO channel."
The company said its U.S. transaction volume increased 20% during the quarter.
While Global Payments does not break out credit and debit transactions, Garcia noted that debit is growing "a little bit" faster than credit.
"A little more than half of our transactions combined are signature debit and PIN, and still PIN debit is substantially below 10% of our total transactions," he said.
Global Payments' North American merchant services unit posted revenue of $303.9 million, up 6%.
A strong performance from its ISO channel and "some modest U.S. pricing initiatives" offset unfavorable Canadian currency exchange rates in its North American operations, Garcia said.
U.S. merchant services revenue reached $222.8 million, up 11%. Canada posted revenue of $81.2 million, down 5.5%.
Global Payments' acquisition last year of 51% of HSBC Holdings PLC's U.K. merchant services business contributed to a 28.7% revenue increase, to $105.9 million, for its international merchant services segment. (The company acquired the rest of the venture in June.)
The company's United Card Services unit in Russia also "performed better than anticipated," Garcia said. Within the segment, Europe posted revenue of $80.5 million, up 30.7%; Asia-Pacific revenue grew 23.2%, to $25.5 million, in part because of the September 2008 expansion into the Philippines.
Global Payments' money transfer business "continues to face challenges and macroeconomic headwinds as well as immigrant labor trends," Garcia said. The segment posted fiscal first-quarter revenue of $31.4 million, a decrease of 14.7%.
Global Payments also announced it acquired on Sept. 28 Auctionpay, a U.S. technology business that provides software, technology and processing for periodic payments and fund raising for nonprofit organizations.
