Alliance Data Systems Corporation(NYSE:ADS) Posts Q2 Core EPS Beat; Misses on Guidance


Data-driven marketing and loyalty-program company Alliance Data Systems Corporation (NYSE:ADS) reported Q1 core earnings above expectations and raised its guidance for the year, but even the raised 2014 earnings view was below Street expectations as the company forecast Q2 core earnings well below analysts’ consensus.

Net income attributable to stockholders rose to $137.4 million, or $2.08 per share, from $129 million, or $1.92 per share, a year earlier. Core earnings, which exclude one-time items, rose to $2.79 per share from $2.55 per share, topping analysts’ mean estimate of $2.72 per share according to Capital IQ and exceeding the company’s own guidance of $2.70.  Revenue climbed 17% to $1.23 billion, slightly missing analysts’ mean estimate of $1.3 billion.

“The first quarter was a decent start to the year with overall performance a bit stronger than expected,” said CEO Ed Heffernan. “Accordingly, we are drifting up our full-year revenue and core EPS guidance and hoping for more good news as the year progresses.”

The company now expects 2014 revenue of $5.25 billion on core EPS of $12.25, from its prior view for $5.14 billion and $12.20, respectively. The new forecast indicates expected revenue and EPS growth of 22% each. Analysts were recently forecasting revenue of $5.2 billion on EPS of $12.30.

For Q2, the company forecast $1.25 billion in revenue and $2.70 in core EPS, increases of 22% and 12%, respectively. Analysts were looking for $1.2 billion in revenue on earnings of $2.93 per share.

Shares were at $264.09 in recent pre-market trading, having eked out a gain of $0.02 per share. They trade in a 52-week range of $155.21 to $300.48.

Analysts have a consensus price target of $277 on the Alliance Data Systems Corporation(NYSE:ADS) indicating a 5% upside.  There are 2 Hold ratings and 8 Buy ratings on the stock.

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