News

First Data reports higher earnings in '03, expects to close Concord deal this month

February 2, 2004

DENVER - First Data Corp. (NYSE: FDC) reported higher fourth-quarter earnings, driven by an 11 percent rise in revenue.

First Data's net income rose to $401.6 million, or 55 cents per share, from $352.5 million, or 46 cents per share, in 2003's fourth quarter.

Earnings per share from continuing operations, which excludes results from the NYCEnetwork, were 54 cents, compared with 46 cents per share a year earlier.

Wall Street analysts, on average, expected the company to earn 54 cents per share.

For the year, net income increased to $1.4 billion. Full-year revenues from continuing operations increased 12 percent to $8.4 billion.

First Data is in the process of acquiring transaction processor Concord EFS Inc. (NYSE:CE - News). It has also been restructuring as it prepares to integrate Concord into its operations.

Speaking to investors and analysts during a conference call, Charlie Fote, First Data's chairman, said that while the Concord deal took longer than expected to execute, it was now expected to close by Feb. 27.

The two companies announced their roughly $7 billion merger last April, but ran into stumbling blocks due to antitrust concerns. In December, First Data agreed to sell its stake in the NYCE network to get Justice Department approval of the deal.

Fote said that acquisition costs will total approximately $150 million in 2004 and could hurt the company's EPS range by up to 10 cents. Including these costs, First Data expects 2004 EPS from continuing operations of $2 to $2.18.

Analysts, on average, expect 2004 earnings of $2.17 per share.

First Data reiterated its long-term EPS growth target of 14 to 17 percent, with long-term revenue growth in the double digits. For 2004, Fote said he expected revenue growth greater than 20 percent due to the Concord merger.

During 2003, First Data repurchased 36.8 million shares of stock for $1.5 billion at an average price of $39.69 per share. The remaining authorization for stock repurchases is $1.146 billion. Since 1998, the company has repurchased more than 156 million shares on a split-adjusted basis for $5 billion under repurchase programs authorized by its board of directors.

The company said it has also exercised its right to call $542 million convertible bonds issued in 2001 and will finance the debt through current operating cash and commercial paper.