DENVER - First Data Corp. July 20 announced a 10-percent revenue increase during the second quarter, up from $2.6 billion last year. According to the company's financial release, revenue hit $2.9 billion and net income came in at $436 million, 56 cents per share.
The company attributed its growth to the Western Union and First Data International segments. Western Union generated revenue of $1.1 billion, up 15 percent, and posted profit of $352 million, up 9 percent. Consumer-to-consumer transactions jumped 27 percent from 2Q '05, and consumer-to-business transactions grew 11 percent.
First Data International generated revenue of $299 million, up 41 percent, and profit of $34 million, up 43 percent.
"We continue to be very pleased with the underlying performance of our International segment and the growth it continues to generate," said Ric Duques, First Data's chairman and chief executive.
Western Union
While Western Union's performance was impacted by consumer reaction to immigration reform in the United States, Duques said the segment's brand strength and global reach will help it stand alone and position it for long-term growth.
The company expects to complete the Western Union spin-off during the late third or early fourth quarter of 2006.
"Our second quarter results were driven by the strong performance of both our Commercial and International segments," Duques said. "As we approach the (Western Union) spin-off, we are very encouraged by the momentum that the new First Data is building toward achieving the high-end of its long-term targeted 8 to 10 percent top- and bottom-line growth."
The Commercial Services segment showed growth, with revenue up 11 percent at $1 billion. Profit came in at $277 million, up 27 percent from 2Q '05. First Data said second quarter results in this segment were driven by a continued focus on sales, operating-cost efficiencies and strong transaction growth.
FI Services and Integrated Payment Systems
The Financial Institution Services and Integrated Payment Systems segments took hits. FI Services pulled in revenue of $452 million and profit of $95 million, down 6 percent and 11 percent respectively. Integrated Payment Systems brought in revenue of $39.9 million and profit of $2.9 million, down 14 percent and 72 percent respectively.
The company said its numbers are in-line with previously announced full-year earnings-per-share guidance of between $2.35 and $2.42. That range includes a positive impact of approximately 3.5 cents from the litigation settlement with Visa.
"If U.S. immigration issues continue to impact the Western Union business at the same rate in the second half of the year, we would expect to deliver full-year EPS at the low end of the range, not including the benefit of the 3.5 cents from the litigation settlement," Duques said. "The full-year guidance excludes future spin costs and any impact from the spin-off, as we are currently unable to reasonably estimate these items."
