This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Global Payments' Shares Languish After Breach, Earnings

NEW YORK ( TheStreet) -- Shares of Global Payments (GPN - Get Report) opened 3% lower on Monday after it said that an "unauthorized access" into its processing system had exposed 1.5 million card accounts.

That follows a 9% decline on Friday, when news of the breach was first reported.

The card payments processor said the hackers accessed so called "Track-2" data but cardholder names, addresses and social security numbers were not obtained by the criminals. It also said the incident was confined to North America.

Still, Visa (V - Get Report) dropped Global Payments from its list of approved service providers after the intrusion and told the company to revalidate its compliance process with the industry's security standard.

Global Payments has said it expects to be reinstated once they have issued a new report of compliance, according to press reports.

Mastercard (MA - Get Report), which also said its customers may have been affected, has not yet taken any action against Global Payments.

The news of the breach overshadowed the earnings report of the payments processor Monday.

The company said revenues for the third quarter rose 17% to $533.5 million. Earnings rose 24% to 73 cents per share from 59 cents in the prior year. Analysts were expecting an earnings per share of 84 cents on revenues of $529.3 million.

"Obviously, the removal of GPN from Visa's "compliant service providers" list is not a positive, but this does seems like it can be remediated in relatively short order and does not preclude GPN from processing transactions for all brands," KBW analyst Sanjay Sakhrani said in a note on Sunday.

The analyst noted that Visa has taken similar actions against service providers in the past following similar breaches and later re-certified them.

Sakhrani's "very rough estimate" of potential damages to Global Payments, based on similar instances at Heartland Payments (HPY) and TJ Maxx (TMX), works up to about $8 million, although it is hard to quantify loss of business.

--Written by Shanthi Bharatwaj in New York

>To contact the writer of this article, click here: Shanthi Bharatwaj.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GPN $70.85 -1.99%
MA $97.92 -0.76%
V $79.01 -1.04%
AAPL $118.30 0.42%
FB $104.24 -1.15%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs