Alliance Data Q2 Profit Tops View; Cuts FY17 Earnings View, Ups Revenue Forecast

(RTTNews) - Alliance Data Systems Corp. (ADS), a provider of data-driven marketing and loyalty solutions, reported Thursday that its second-quarter net income dropped 2 percent to $138 million from last year's $141 million.

Earnings per share, however, climbed 99 percent to $2.47 from $1.24 a yer ago, reflecting a 5 percent drop in share count.

The results included a $1.14 in accretion charges related to the purchase of the remaining 20 percent interest in BrandLoyalty.

Core earnings per share were $3.84, compared to $3.68 last year.

On average, 23 analysts polled by Thomson Reuters expected earnings of $3.73 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted EBITDA increased 6 percent to $499 million.

Revenue increased 4 percent to $1.82 billion from last year's $1.75 billion. Analysts expected $1.84 billion.

For the first time since 2015, Epsilon delivered a second-consecutive quarter of solid revenue and adjusted EBITDA growth, while Card Services continued to deliver double-digit revenue growth, the company said.

Looking ahead, for fiscal 2017, the company said it is increasing revenue guidance to $7.8 billion from $7.7 billion, but lowering core earnings per share guidance to $18.10 from $18.50, about a 2 percent decrease to reflect the timing issue at BrandLoyalty. The revised outlook reflects a 9 percent increase in revenues over 2016 and a 7 percent increase in core earnings per share.

For the year 2017, analysts expect earnings of $18.54 per share and revenues of $7.81 billion.

Further, the company issued initial guidance for 2018, expecting revenue of $8.7 billion, representing a 12 percent growth rate and core earnings per share of $21.50, representing 19 percent growth over 2017. For the year 2018, analysts expect earnings of $21.42 per share and revenues of $8.59 billion.

The outlook is based upon expectations of flat to lower principal loss rates in 2018 and accelerating trends across the majority of the Company.