(Reuters) – Global Payments’ third-quarter profit fell nearly 13% on Wednesday, as higher costs offset gains from the fees it charges merchants for the company’s transaction processing technology.
The company also said it will sell its medical software unit, AdvancedMD, to technology-focused investment firm Francisco Partners.
WHY IT’S IMPORTANT
Fees earned by payment-tech providers are correlated to spending volumes and can offer cues on the financial health of the U.S. consumer.
Investors are closely scrutinizing such commentary, especially after major players such as American Express reported a softer spending environment.
CONTEXT
Global Payments is in the midst of a strategy reset as it looks to streamline operations and divest non-core assets. It has labeled 2025 as a “transition year” and promised to return more capital to shareholders.
The company unveiled a $600 million accelerated share repurchase plan on Wednesday.
BY THE NUMBERS
Total operating expenses grew nearly 11% from a year earlier to $2.13 billion in the three months ended Sept. 30.
Revenue grew 5.1% to $2.60 billion. Merchant solutions, Global Payments’ biggest business, fetched nearly 6% higher revenue than a year earlier.
Net profit attributable to the company fell to $315.1 million, or $1.24 per share, compared with $361.8 million, or $1.39 per share, a year earlier.
MARKET REACTION
Shares were up 2% in thin trading volume before market open.
(Reporting by Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri)
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