STRATEGIC PARTNERS
April 28, 2003
MEMPHIS, Tenn. -- Transaction processor Concord EFS Inc. (CE.N) said its first-quarter 2003 net income rose 43 percent from a year earlier, as it added ATMs to its Star network and saw transactions rise 22 percent.
Concord, which is being purchased by First Data Corp. (FDC.N), posted earnings of $77.7 million, or 16 cents per share, up from $54.2 million, or 10 cents per share, in 2002's first quarter.
Revenue rose 23 percent to $519.9 million, up from $421.7 million.
Concord said it expects full-year per share earnings at the low end of its expected range of 75 cents to 79 cents, in part because merger talks made it "impossible" for Concord to buy back as much stock as it planned in the quarter.
Analysts polled by Thomson First Call on average expected per share earnings of 17 cents for the first quarter and 76 cents for the full year.
On the morning of April 29, Concord shares fell by 27 cents, or 2 percent, to $13.22. The shares have fallen by more than half in the last year but risen from $9.40 since the First Data merger was announced.
Concord said its first-quarter 2003 network services revenue rose 7 percent from a year earlier, to $155 million, as transactions grew 16 percent.
Concord said it added 1,431 ATMs to its processing business in the quarter, for a total of just above 96,500.
The Starnetwork now has about 127.4 million cards issued by 6,220 financial institutions, and about 1.24 million ATMs and point-of-sale locations displaying the Star mark.
Payment services revenue rose 32 percent, to $364.8 million as transactions grew 31 percent. Acquired credit and signature debit, PIN-based debit and electronic benefits transfer (EBT)transactions were up 29 percent, 30 percent and 28 percent, respectively.
Payment Services revenue includes interchange fees of $231.3 million for 2003's first quarter, up from $159.9 million in 2002's first quarter. Payment Services currently provides processing services for approximately 417,000 POS locations, including just over 16,000 at quick-service restaurants.
Under the merger, First Data is to exchange 0.4 First Data common shares for each Concord common share. The transaction was valued on April 28 at $7.5 billion, based on the 486.5 million Concord shares outstanding as of April 1.
