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Total System Services’ Organic Growth Boosts 3Q15 Revenue

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Price movement for Total System Services

Total System Services (TSS) has a market cap of $9.5 billion. Its YTD (year-to-date) price movement is going up quarter-over-quarter in 2015. After its 3Q15 earnings report, TSS rose 0.90% to close at $51.65 per share on October 27, 2015. Revenue and income rose 2.2% and 46.4%, respectively, in 3Q15 compared to 2Q15. The price movements on weekly, monthly and YTD bases were 4.4%, 15.4%, and 53.2%, respectively.

Technically, sometimes Total System Services has broken the support of 20-day and 50-day moving averages in 2015. Currently, it’s trading at 7.4% above the 20-day moving average, 10.0% above the 50-day moving average, and 24.0% above the 200-day moving average.

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The PowerShares DWA Financial Momentum ETF (PFI) invests 2.8% of its holdings in Total System Services. The ETF tracks an index of US financial firms selected and weighted by price momentum. PFI’s YTD price movement is 2.4% as of October 26, 2015. The Guggenheim S&P 500 Equal Weight Technology ETF (RYT) invests 1.8% of its holdings in Total System.

Below are some of Total System Services’ (TSS) competitors and their market caps.

  • Fiserv (FISV) — $22.4 billion
  • Fidelity National Information Services (FIS) — $20.7 billion
  • Vantiv (VNTV) — $8.9 billion
  • Blackhawk Network Holdings (HAWK) — $2.3 billion

Total System Services’ 3Q15 performance

Total System Services reported net revenue of $707.9 million in 3Q15, an increase of 2.2% compared to net revenue of $692.7 million in 2Q15. The cost of services as a percentage of revenue decreased 3.0% in 3Q15 on a quarterly basis. Net income and EPS (earnings per share) increased to $122.1 million and $0.65, respectively, in 3Q15, an increase of 46.4% and 44.4%, respectively, on a quarterly basis.

Cash and cash equivalents increased 28.2% in 3Q15. The current ratio has increased to 2.75, and the debt-to-equity ratio has decreased to 1.05 in 3Q15 compared to the current ratio and debt-to-equity ratio of 2.37 and 1.12, respectively, in 2Q15.

Following are some of Total System’s key 3Q15 activities:

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  • The company extended its relationship with U.S. Bank to support the bank’s commercial card service and acquiring business.
  • Total System Services and Acquirer Systems launched ASTREX, a new testing solution that simplifies the EMV (Europay, MasterCard, and Visa) certification process for both value-added resellers (or VARs) and integrated software vendors (or ISVs).
  • The company signed an agreement to process Metro Bank’s credit and debit card portfolio on its TS2 processing platform, as well as provide Metro Bank fraud management services through its managed services in EMEA (Europe, the Middle East, and Africa).
  • The company declared a quarterly cash dividend of $0.10 per share on its common stock.
  • The company expanded Total System Services Enterprise Tokenization solution to process tokenized transactions made using Android Pay.
  • The company extended its payment agreement with ING Bank N.V. for commercial card portfolio.
  • Premier Bank Limited, a commercial bank in Bangladesh, signed an agreement to upgrade to PRIME 4, the latest version of Total System Services’ PRIME payment solutions platform.
  • Samsung Pay will offer Total System Services’ clients, both issuing banks and acquirers and their merchants, a simple and safe way to offer and accept mobile payments using any terminal.

About Total System

Total System Services supports businesses, financial institutions, governments, and consumers with a wide range of payment tools for credit, debit, prepaid, mobile, chip, healthcare, and merchant acceptance.

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