NEW YORK (TheStreet) -- Shares of Total System Services (TSS) - Get Report are dropping by 11.78% to $40.58 on Wednesday morning, as the company reported 2015 fourth quarter earnings results and after its corporate credit and debt rating was lowered by the Standard & Poor's Ratings Services.
On Tuesday, the Columbus, GA-based electronic payment solutions provider reported adjusted earnings of 57 cents per share, which missed analysts' expectations of 60 cents.
Revenue climbed by 12.9% to $716.8 million for the quarter, which beat analysts' estimates of $691.9 billion.
After the market close yesterday, TSYS announced it would acquire TransFirst Holdings, a credit card processing solutions company, for about $2.35 billion.
"TransFirst significantly increases our scale and opportunity within the highly attractive merchant space, and particularly the profitable and fast-growing small and medium-sized business segment," CEO of TSYS M. Troy Woods said in a statement.
The all-cash deal will make TSYS the sixth largest U.S. merchant acquirer by revenue, the company added.
The Standard & Poor's Ratings Services decreased its corporate credit and debt ratings on TSYS by two levels to BBB- from BBB+ yesterday, as the company borrowed to complete the acquisition, Bloomberg reported.
Separately, TheStreet Ratings Team has a "buy" rating with a score of A+ on the stock.
The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income.
Although no company is perfect, currently the team does not see any significant weaknesses which are likely to detract from the generally positive outlook.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: TSS