Global Payments stands by view of card breach

Global Payments Inc will not know for weeks the cost of a cyber theft revealed Friday, executives of the credit card payment processor said, but they stood by their earlier estimate that no more than 1.5 million cardholder account numbers were compromised in the data breach.

The comments came as the company reported quarterly earnings that just missed analysts' estimates due to higher expenses. Its shares fell more than 3 percent by midday on Monday after dropping 9 percent on Friday.

Executives of the Atlanta-based company said it would be weeks before they could estimate the impact of the break-in on coming financial results. They repeated their statement from Sunday that the data breach was confined to North America and affected no more than 1.5 million credit cards, a figure considerably less than some analysts had feared.

"We have a high degree of confidence in that number," Chief Executive Officer Paul Garcia said in a conference call with stock analysts after the earnings report.

Officials said they will pay the cost of replacing cards whose numbers may have been stolen by data thieves. Some expenses may be covered by insurance policies they said.

Garcia cautioned analysts against estimating the cost based on past data losses by other companies, but said: "This is manageable. We will get through this."

The company will be "circumspect" about using its capital for stock buybacks or acquisitions until it knows how much it will need to spend on the breach and added security, executives said.

Shares of Global Payments were down 3.2 per cent at $45.94 in midday trading.

Global Payments said on Friday that it had found "unauthorized access" into its system early in March.

Analysts pressed executives for details of when and how the company discovered that credit card numbers had been taken from some of its North American servers earlier this year. Garcia said he would not give specific details because of an ongoing investigation by federal authorities.

He said the "approximately three weeks" the company discovered that card data may have been taken and "literally within hours" contacted law enforcers.

Payment network operators MasterCard Inc, Visa Inc, American Express and Discover Financial Services have confirmed they were affected, which could expose their cardholders to fraudulent charges.

Visa has dropped Global Payments from its list of approved service providers.

Global Payments is one of dozens of companies that operate along the payment-processing chain. They are targeted by hackers because of the vast amount of sensitive financial information they handle.

The company posted net income of $57.92 million, or 73 cents per share, for the third quarter ended February 29, compared with $47.78 million, or 59 cents per share, a year earlier.

Revenue rose 17 percent to $533.5 million.

Excluding items, Global Payments earned 83 cents a share. Analysts on average were expecting 84 cents a share on revenue of $529.3 million, according to Thomson Reuters I/B/E/S.

The company backed its revenue and earnings outlook for the year.

Copyright @Thomson Reuters 2012