Alliance Data Systems Corporation ADS is a premier private label credit card processing firm for mid-market specialty retail stores in the U.S. In Canada, it owns and operates the premier coalition loyalty-marketing program (AIR MILES).
Alliance Data is banking heavily on the Conversant acquisition and expects higher contribution in the latter half of 2015 as initiatives there gain traction.
The company sees share repurchase as a top priority and thus plans $1 billion buyback in 2015.
However, in the event of actual redemptions by AIR MILES Reward Program being more than expected, or if there is an increase in costs related to redemption of AIR MILES reward miles, profitability will likely be affected.
Nonetheless, Alliance Data expects a robust 2015 as its fundamental strength is supported by a stable credit environment, low funding costs and expense leverage.
Alliance Data does have a decent history when it comes to earnings as the stock has beaten estimates in the last four quarters, making for an average surprise of 2.9%.
Currently, Alliance Data has a Zacks Rank #3 (Hold), but that could definitely change following its earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
How was the Bottom Line?
Alliance Data beats on earnings again. Our consensus called for EPS of $3.68 per share, and the company reported EPS of $3.72 per share.
How was the Top Line?
Revenues of $1.6 billion were almost in line with the Zacks Consensus Estimate.
Key Stats to Note
- Adjusted EBITDA increased 20% year over year to $453 million.
- AIR MILES’ reward miles issued increased 5% while reward miles redeemed increased 7%.
- 2015 revenues expectation is reiterated at $6.5 billion. The core EPS expectation is also reiterated at $15.00.
- Expects 2016 core EPS of least $17.00 on revenues of at least $7.2 billion.
Check back later for our full write up on this ADS earnings report later!
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