News

Concord's 3Q '03 negatively impacted by M&A charges

October 22, 2003

MEMPHIS, Tenn. - Concord EFS Inc. reported third-quarter earnings of $92.5 million, a 1.8 percent drop from $94.3 million in 2002's third quarter, on charges related to its proposed acquisition by First Data Corp.

Excluding the charges, earnings for the quarter grew 17 percent to $102.1 million, or 21 cents a share, which tops the Thomson First Call analysts' consensus estimate of 18 cents a share.

Concord's third-quarter revenue grew 14 percent to $588.5 million; transactions increased 15 percent during the quarter.

Concord said expenses related to the First Data acquisition would be higher than expected. Excluding investment banking fees payable upon closing of the First Data deal, Concord now sees expenses of $20 million to $23 million for 2003.

In July, it had estimated expenses would be $15 million to $18 million, or about 2 cents a share. As of Sept. 30, merger-related expense totaled $17.4 million.

According to a Dow Jones Business News report, Concord still sees 2003 earnings per share of 75 cents to 79 cents for 2003, excluding charges. Wall Street is looking for 2003 earnings of 72 cents a share on revenue of $ 2.33 billion.

The company first issued its 2003 guidance in February. In April, after the merger agreement was announced, Concord said it expected earnings per share for the year would be at the low end of February guidance, because merger discussions prevented the company from buying back its shares as aggressively as planned.

During the third quarter, Concord repurchased and retired 21.8 million shares, spending $306.3 million. The company had about 486.8 million shares outstanding as of July 31. As of Sept. 30, the company had bought back and retired a total of 48.6 million shares at a cost of $699.9 million since it began the repurchase plan in the third quarter of 2002.