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Earnings Push Amex, Others Higher

Stocks and Bull Run

Earnings reports helped send some companies higher on positive results, with American Express jumping more than 12 percent on the week. The company showed some traction with its turnaround efforts in the wake of the loss of its Costco relationship. The fact that consumer spending has proved to be resilient cheered investors, and margin control also came in a bit better than many had expected.

Similarly, PayPal made a double-digit percentage leap, up nearly 11 percent on the week, as results also buoyed views on the stock, along, of course, with a boost to the revenue projections moving forward. Looking out three years, the firm stated that operating margins, in addition to revenue growth, will be stable to higher over that timeframe. The margin projections, said some Street analysts, seemed to be enough to allay fears about the impacts of recent deals with Visa and Mastercard.

Blackhawk Network Holdings was also up, gathering 5 percent as the firm saw an activist stakeholder, P2 Capital Partners, push its stake to above 5 percent, usually regarded by The Street as a threshold above which shareholders agitate for some change at the corporate level. And according to filings with the Securities and Exchange Commission, P2 Capital is indeed at the level of 5.3 percent ownership, with the purpose of “opening negotiations,” as yet undefined, with Blackhawk management.

Among declining names, earnings weighed. Euronet Worldwide saw 9 percent growth in its top line, driven by its largest segment in electronic funds transfer, as transactions grew in number 22 percent year over year to 488 million. But other segments saw more modest growth, at 9 percent year over year to $204 million. The pay unit actually saw a slide, down 4 percent to $167 million, and that was due to declines in India, as higher value/non-mobile transactions lost ground.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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