UPDATE 2-Alliance Data boosts forecast for second time this year

Thu Jul 17, 2014 11:52am EDT

* Raises FY forecast for second time in 2014

* Second-quarter core EPS $2.90 cents vs est $2.73

* Revenue at LoyaltyOne up 62 pct

* Shares up 3 pct (Updates share movement, background)

July 17 (Reuters) - Credit card processor Alliance Data Systems Corp bumped up its full-year earnings forecast for the second time this year after posting a better-than-expected quarterly profit, helped by strong sales in its customer loyalty programs business.

Sales at the unit, LoyaltyOne, jumped 62 percent to $355.6 million in the second quarter, accounting for about 28 percent of the total revenue.

Alliance Data's shares were up 1 percent at $278.09 midday on the New York Stock Exchange.

LoyaltyOne owns and operates the Air Miles Reward Program, one of the top loyalty programs in Canada.

The company's private-label credit cards business also performed well during the quarter.

Revenue from the business, which provides services to retailers such as Ann Taylor and Buckle Inc, rose 16 percent to $557.3 million.

The company's online marketing unit, which has partnerships with Twitter Inc and Facebook Inc, reported an 8 percent increase in revenue to $357.1 million.

Facebook entered into a partnership with Epsilon, Alliance Data's online marketing unit, last year to help advertisers better target customers through loyalty programs.

The unit followed that up with a similar deal with Twitter this January.

The company raised its full-year revenue forecast to $5.30 billion from $5.25 billion and core earnings forecast to $12.35 Per share from $12.25.

Analysts were expecting earnings of $12.35 per share on revenue of $5.27 billion, according to Thomson Reuters I/B/E/S.

The company's net income attributable to shareholders rose to $137.4 million, or $2.19 per share.

The company reported core earnings of $2.90 per share, topping the average analyst estimate of $2.73 per share.

Total revenue rose 23 percent to $1.27 billion, edging past analyst's average estimate of $1.25 billion.

Total operating expenses rose 29 percent to $982.7 million for the quarter.

Alliance Data's shares have risen about 5 percent this year. Shares of the Dallas-based company closed at $275.17 on Wednesday on the New York Stock Exchange. (Reporting By Neha Dimri in Bangalore; Editing by Saumyadeb Chakrabarty)

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