First Data Announces Fourth Quarter Earnings of $0.55 per Share, Up 20%

Tuesday 3 February 2004 13:33 CET | News

First Data has reported fourth quarter and full-year results. Fourth quarter earnings per share (EPS) rose 20% to $0.55, compared with $0.46 in the prior year fourth quarter.

Fourth quarter EPS from continuing operations rose 17% to $0.54 from $0.46 in fourth quarter 2002. (Continuing operations excludes results from NYCE, which is accounted for as a discontinued operation.) 2003 EPS of $1.88, which included $0.03 of charges, rose 17%, compared to 2002 EPS of $1.61, which included $0.05 of charges. Annual net income increased to $1.4 billion. Full-year revenues from continuing operations increased 12% to $8.4 billion, with fourth quarter revenues growing 11%. Full-year cash flow from operations increased to approximately $2 billion. During 2003, the company 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. Western Union and ValueLink, combined, handled more than one billion transactions in 2003, up 26%. Merchant Services transactions were 12.2 billion in 2003, up 23%. Outlook Fote said that expected cash outlays of approximately $150 million during 2004 relating to integration and restructuring are in line with the companys previous projections. From an accounting standpoint, these cash outlays could negatively affect First Datas 2004 EPS range by up to 10 cents per share, depending on the timing of the execution of the Concord merger integration plan and the timing of the NYCE divestiture. This results in an EPS range for 2004 of $2.00 to $2.18 from continuing operations. The company also updated its long-term growth objectives, reiterating its long-term EPS growth range of 14-17% with long-term revenue growth in the double digits. For 2004, Fote said he expected revenue growth of greater than 20% due to the Concord EFS merger. Business Segment Highlights Payment Services, comprised primarily of Western Union, achieved solid revenue growth of 15% (12% excluding the impact of the strong Euro) in 2003 to $3.7 billion. Annual operating profits increased 18% to $1.2 billion with profit margins improving to 34% from 33% in 2002. Fourth quarter revenue of $973 million and operating profits of $323 million each grew 13% compared with fourth quarter 2002. The strength of Western Union is its ability to handle transactions securely and reliably. For the first time, Western Union and ValueLink handled more than one billion annual transactions for consumers and businesses globally. Consumer-to-consumer, consumer-to-business and prepaid transactions grew 19%, 12% and 32%, respectively. In Mexico, money transfer transactions remained strong with annual growth of 22%, driving revenue growth of 16%. International transaction and revenue growth were 25% and 24%, respectively, for the year. Forty-nine of the top 50 countries achieved positive transaction growth in 2003. Western Union finished the year with more than 182,000 agent locations, a 21% increase over the prior year. Today, more than 70% of Western Unions agent locations operate outside the United States, many in key developing countries around the world. Western Union has more than 25,000 locations in India and China supporting worldwide corridor transactions to those countries. Significant location rollouts during 2003 included: 10,000 in Europe; 9,000 in India and China; 3,000 in Australia; and 2,000 in the Middle East, primarily in Pakistan. Merchant Services achieved strong results for the year with 14% revenue growth to $3.0 billion and operating profit growth of 13% to $807 million. Fourth quarter revenues of $826 million grew 18%, and operating profits of $245 million grew 24%. Margins were 27% for the year. Merchant transactions grew 23% for the year and 20% for the quarter. During the quarter, First Data sold an agent bank and merchant portfolio to iPayment, Inc. for $55 million in cash and extended a long-term processing contract with iPayment. This t

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Categories: Payments & Commerce | Payments General
Countries: World
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Payments & Commerce