Magazine article American Banker

Fleet Conversion, Amro Deal Give TSYS a Boost

Magazine article American Banker

Fleet Conversion, Amro Deal Give TSYS a Boost

Article excerpt

Total System Services Inc.'s first-quarter results were its best in five years, and even its executives said they were surprised.

"We have exceeded our own internal expectations," chief executive Philip W. Tomlinson said Wednesday in a conference call with analysts.

The transaction processor said revenue was $350 million, 22.7% more than a year earlier. Net income rose 41.7%, to $45.1 million, or 23 cents a share. Analysts had expected 20 cents a share.

"I am pretty pumped up about where we are and where we are headed," Mr. Tomlinson said. "We are winning in the marketplace. We are doing a lot of things right."

Because of the strong results, the Synovus Financial Corp. unit has raised its full-year earnings guidance. It now expects an increase of 22% to 25% instead of 19% to 22%.

The growth came from several areas. The core business (processing card payments) increased during the quarter when Bank of America Corp. converted the credit card portfolio of FleetBoston Financial Corp., which B of A acquired in 2004. Last week TSYS announced it had won Fifth Third Bancorp's card processing business.

TSYS, of Columbus, Ga., signed its first issuer processing agreement in continental Europe during the quarter, with ABN Amro Bank of the Netherlands. It already has customers in the United Kingdom, and with the ABN Amro deal it now has a 6% share of the global processing market, Mr. Tomlinson said. By yearend TSYS will be in 15 European countries; it is now in eight or nine.

Mr. Tomlinson said the company would consider buying companies in Europe, where most transactions are processed by regional associations. "If we saw the right opportunity for one of these cooperatives or associations, I think we would go after it," he said.

TSYS completed its buyout of Visa U.S.A.'s 50% share in Vital Processing Services LLC last month; the Tempe, Ariz. …

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