News

First Data's earnings rise in 3Q '03

October 14, 2003

DENVER - First Data Corp. said its third-quarter net income rose 5.4 percent on strong revenue growth at Western Union and its other business segments.

First Data reported net income of $360.9 million, or 49 cents a share, up from $342.5 million, or 45 cents a share, in 2002's third quarter.

Results for the latest quarter included restructuring charges of $19.5 million, or 2 cents a share, as well as a charge for a litigation settlement, investment losses and a gain from divestitures.

Without these items First Data said its "recurring" earnings per share came to 51 cents a share, matching the estimate of analysts surveyed by Thomson First Call.

Revenue rose 9.9 percent to $2.14 billion from $1.95 billion.

Revenue from First Data's payment-services segment climbed 14 percent to $935.2 million.

Western Union, which contributes more than 80 percent of the segment's revenue, saw prepaid-transaction revenue increase 34 percent, while its consumer-to-consumer revenue rose 18 percent, and consumer-to-business revenue rose 11 percent. Western Union had about 169,000 agent locations as of the end of the quarter, up 25 percent from the same period a year earlier. Western Union will have more than 180,000 agent locations by the end of 2003, according to First Data.

At First Data's merchant-services business, revenue rose 12 percent to $785.1 million, and the card-issuing-services business contributed revenue of $492 million, up 1.4 percent.

Some analysts said the latest results were a sign of business deterioration.

The numbers provided evidence that First Data's growth rates is slowing, said analyst David M. Scharf of JMP Securities LLC. He lowered First Data's investment ratings to "market perform" from "outperform."

Shares of First Data closed on Oct. 14 at $37.20, down $2.66, or 6.7 percent, on the New York Stock Exchange.

Charlie Fote, First Data's chairman and chief executive, said the company expects full-year revenue growth of close to 14 percent and full-year reported EPS to be in the middle of the $1.87 to $1.93 range.