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Jack Henry Profit Rises

TSC and IRIS Staff

Financial transaction processor Jack Henry(JKHY Quote) reported a 20.7% rise in earnings for the third quarter, aided by margin growth in its support and service segment.

The company earned $23.5 million, or 25 cents a share, in the quarter, compared with $19.4 million, or 21 cents a share, a year ago. Analysts surveyed by Thomson First Call were expecting earnings of 25 cents a share.

Third-quarter revenue rose 8.3% from a year ago to $145.5 million as against analysts' expectation of $153.1 million.

"The net results of the quarter were in-line with our expectations, with the only shortfall being in license revenue in the credit union segment," the company said.

The gross profit margin improved 114 basis points to 43.8% and operating profit margin improved 77 basis points to 23.9%.

Backlog, which is a measure of future business and revenue, stood at $213.3 million as on March 31.

Support and service revenue increased 14.7% to $106.1 million and gross margin improved 235 basis points to 35.9%.