Alliance Data Systems Profit Tops Estimate; Stock Down - Update

(RTTNews) - Alliance Data Systems Corp (ADS), a provider of data-driven marketing and loyalty solutions, Thursday reported a higher first-quarter profit, led by growth across all segments. While quarterly earnings topped Wall Street estimates, revenue fell short of expectations.

Moving ahead, the company detailed some weak earnings forecast for the second quarter, while lifting expectations for the full year 2014.

Alliance Data shares dropped 4.4 percent in morning trade on the New York Stock Exchange, following the announcement of results.

Plano, Texas-based Alliance Data posted quarterly net income to stockholders of $137.4 million or $2.08 per share, up from $129 million or $1.92 per share last year.

Excluding items, core earnings for the quarter were $184.5 million or $2.79 per share, compared with $171.8 million or $2.55 per share a year ago. On average, 22 analysts polled by Thomson Reuters expected earnings of $2.72 per share for the quarter. Analysts' estimates typically exclude special items.

The company said that acquisition costs related to BrandLoyalty decreased core earnings by about $0.04 per share for the quarter.

Revenue for the quarter grew 17 percent to $1.23 billion from $1.05 billion in the prior year. Twenty analysts had a consensus revenue estimate of $1.26 billion for the quarter.

For the second quarter, the company projects core earnings of $2.70 per share with revenues of $1.25 billion. Analysts currently expect earnings of $2.93 per share on revenues of $1.24 billion for the quarter.

The company expects acceleration in core earnings-per-share growth for the remainder of 2014 as the diluted share drops in conjunction with the maturity of the $345 million convertible notes in May 2014.

For 2014, the company raised its guidance from $5.14 billion to $5.25 billion in revenue, and from $12.20 to $12.25 in core earnings per share. Analysts currently expect revenue of $5.19 billion and earnings of $12.30 per share for the year.

Alliance Data stock is trading at $252.36, down $11.71 or 4.43%, on a volume of about 846k shares.