* Q2 core EPS $2.13 vs est $1.91
* Sees Q3 core EPS $2.18 vs est $2.33
* Sees 2012 rev $2.50 bln vs est $3.56 bln
July 19 Alliance Data Systems Corp's
profit beat estimates as credit card spending rose in its
private label services and credit segments, and the company said
it expects "significant deals" in the unit to drive growth in
The company, which provides private-label credit card
services to retailers, operates under three segments -
LoyaltyOne, Epsilon and Private label services and credit.
The company said last month it would buy $475 million worth
of private-label credit card accounts from department store
operator Bon-Ton Stores Inc.
"Private Label continued to rip-it with exceptionally strong
mid-teens growth in both credit card sales volume and
receivables," Chief Executive Ed Heffernan said in a statement.
He expects this growth to continue throughout 2012 and into
Alliance Data plans to close the Bon-Ton acquisition in July
and expects full benefits from the deal to be realized in 2013.
Credit card spending rose 18 percent to $2.87 billion, while
charge-offs fell 230 basis points to 4.9 percent.
"After years of decline, credit card spending is increasing
again," Heffernan said.
PROFIT FORECAST BELOW ESTIMATES
The company expects third-quarter core earnings of $2.18 per
share, on mid single-digit revenue growth.
Analysts on average were expecting core earnings of $2.33
per share, according to Thomson Reuters I/B/E/S.
The company also raised its full-year revenue forecast to
$3.50 billion and core earnings to $542 million.
Core earnings grew to $2.13 per share, while revenue grew 17
percent to $866 million, for the second quarter, above estimates
of $1.91 per share on revenue of $834.8 million.
Shares of Alliance Data, which has a market value of $6.60
billion, have gained 26 percent since the start of the year.
They were up 1 percent at $131.48 in morning trade on Thursday
on the New York Stock Exchange.