If Total System Services Inc. were a baseball team, its third quarter would constitute a rebuilding season.
Executives at the Columbus, Ga., payment processor were optimistic about developments abroad as the company, which is still recovering from the downturn in the economy, attempts its comeback.
"They are trying to develop the farm team, which is merchant acquiring, and they are trying to take advantage of the free agents and going after some acquisitions," said Thomas C. McCrohan, managing director for equity research at Janney Montgomery Scott in Philadelphia.
"They are trying to rebuild."
Phil Tomlinson, the chairman and chief executive of TSYS, said its prospects today are now best found in Europe.
He said TSYS will continue to move on "home markets" in the U.K., Ireland and the Netherlands.
"I think it is interesting," Tomlinson said.
"A year ago, I couldn't have said Germany was a home market, but I can today."
In the third quarter, TSYS signed an agreement with Permanent TSB, a Dublin, Ireland, retail banking company.
The previously undisclosed accord brings TSYS its first European debit client, Tomlinson said.
TSYS also said it signed a multiyear contract with Bank of Montreal, Canada's largest MasterCard issuer.
TSYS would provide account processing and other services for the bank's consumer and commercial credit card portfolios.
TSYS also announced a pact with Swisscard AECS AG, a joint venture of Credit Suisse AG and American Express Co.
Swisscard agreed to use TSYS' TS2 processing platform to handle its 1.2 million Amex, Visa Inc. and MasterCard Inc. consumer and commercial cards.
TSYS' international deals do not detract from more troubling domestic developments, analysts said.
TSYS' largest market is still the U.S. credit card space, said Robert Dodd, an analyst at Morgan Keegan & Co.
"The U.S. credit card market is still shrinking," he said.
"They are getting some traction in some international markets, but the U.S. is by far [TSYS'] biggest piece of their business. And the headwinds are still very strong."
Indeed, a Javelin Strategy and Research report released last month said 56% of consumers queried in 2009 had used a credit card in the past month, down from 87% in 2007.
The Pleasanton, Calif., firm expects this trend to continue, at least for the short term.
"People just aren't opening new credit card accounts," Dodd said.
"More often than not, you see people closing credit card accounts."
TSYS executives said the prospects of its U.S. business are looking better.
"The truth is our news is brighter today than it's been since early 2008," Tomlinson said. "We're not out of the woods yet, but we believe we are starting to see a little bit of daylight."
The company's revenue for the third quarter rose 1% from a year earlier, to about $433 million.
Its net income dropped 16.9%, to about $45.7 million.
Wall Street responded positively.
At midday Thursday, TSYS shares were up 1.76%, to $5.51.