The transaction processor Heartland Payment Systems Inc. of Princeton, N.J., said its May acquisition of Alliance Data Network Services LLC boosted its revenue and led to record second-quarter earnings.

Its revenue rose 18.3% from a year earlier, to $395 million, and net income rose 10.3%, to $11.5 million. Earnings per share rose 15%, to 30 cents.

Heartland acquired Alliance Data Network Services, a processor focused primarily on the petroleum industry, from Alliance Data Systems Corp. of Dallas. Robert Carr, Heartland's chief executive, said during a conference call with analysts that it has been "the most transformational acquisition in our history."

The purchase affected one month of second-quarter results.

Heartland processed $17.1 billion worth of transactions during the quarter, up 29%.

Mr. Carr said Heartland's market penetration deepened in the quarter and that it had a steady increase in merchants with volume of $500,000 or more.

However, "there is no doubt we're in a challenging environment," he said. Same-store sales fell for the first time in the company's history, by 10%.

"This is indicative of headwinds that will probably be with us for the rest of 2008," Mr. Carr said. "But despite one of the weakest economies in memory, we managed to grow faster than the industry."

Heartland maintained its full-year guidance of 16% to 18% net revenue growth and earnings per share of $1.13 to $1.17. The average analyst estimate for full-year earnings per share is $1.16.

Thomas C. McCrohan, an analyst with Janney Montgomery Scott LLC, wrote in a research note issued Tuesday that Heartland's efforts to win larger clients could pose risks.

"The company is in a significant growth stage of adding new merchants to its proprietary processing system after expanding its direct sales force over the past few years," he wrote. "In addition, it appears that the company is beginning to target larger merchants, which could result in increased pricing competition, and lower net revenue spreads."

However, Mr. McCrohan called Heartland's solid second quarter, unchanged full-year guidance, and the added processing volume from Alliance Data positive signs. "We foresee attractive growth in dollar processing volume this year, and are modeling for over 35% growth in total processing volume versus industry growth rates in the low double digits," he said.

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