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Alliance Data Beats, Raises View

The company gives guidance for 2007 that also tops Wall Street targets.

Alliance Data Systems

(ADS) - Get Alliance Data Systems Corporation Report

posted a big earnings beat for the third quarter and boosted its full-year profit forecast Wednesday.

The Dallas-based transaction-services outfit reported earnings of $48.8 million, or 60 cents a share, up from $35.9 million, or 38 cents a share, a year earlier.

On a so-called cash basis, which excludes items, Alliance Data's earnings jumped to $66.1 million, or 81 cents a share, from $43.8 million, or 51 cents a share, last year.

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The cash earnings handily topped the Thomson First Call average analyst estimate of 67 cents. The company's own forecast had called for cash earnings of at least 62 cents a share.

Revenue surged 32% to $506.6 million from $384.8 million, surpassing Wall Street's forecast of $471 million. It was first time the company's revenue topped the half-billion dollar mark in a quarterly period.

Alliance Data said results were driven by strength in its marketing services division, where revenue jumped 50% to $218.6 million.

For 2006, the company raised its cash earnings target to $3 to $3.05 a share from its earlier view of $2.75. Analysts, on average, expect earnings of $2.96 a share.

Alliance Data also gave initial guidance for 2007, forecasting cash earnings of at least $3.50 a share and revenue of at least $2.1 billion. Wall Street's current forecasts call for earnings of $3.32 a share and revenue of $2.14 billion.

Shares were up $2, or 3.6%, to $58 in after-hours trading.