First Data Reports Strong Third Quarter ResultsDate: Thursday, October 14, 2004
First Data Corp. (NYSE: FDC - News) delivered another strong quarter, with earnings per share (EPS) from continuing operations of $0.54. Comparable third quarter 2003 EPS from continuing operations were $0.48. Revenue grew 21% to $2.5 billion. Net cash provided by operating activities for the quarter was $750 million.
"The point-of-sale activity for Western Union money transfers and merchant transactions continues to be the major contributor to our strong operating performance," said Charlie Fote, chairman and chief executive officer. "We continue to be pleased with the addition of Concord to the First Data family. Its performance is helping drive First Data results. Additionally, we will achieve our $30 million in synergy savings related to the Concord integration for this year."
Third quarter 2004 results included $0.03 of charges, which were comprised of integration expenses and other charges that impacted EPS by $0.02 and $0.01, respectively.
Significant company news in the quarter included Washington Mutual, Inc.'s extension of its relationship with the STAR® Network and the announcement of Bank of America's intent to extend and expand its relationship across all segments of First Data.
The Western Union money transfer business had another outstanding quarter posting revenue growth of 13% to $861 million, with profits up 16% to $296 million.
A significant milestone in the quarter was the opening of the 200,000th money transfer location. This far-reaching global network supported strong consumer demand, which yielded consumer-to-consumer transaction growth of 18%, led by international growth of 23% and Mexico growth of 14%.
Overall, the Payment Services segment delivered in-line results growing revenue 10% to $1.0 billion and delivered operating profit of $332 million. Operating margin remained strong at 33%, led by Western Union.
Merchant Services' results were driven by 65% transaction growth. Revenue was $983 million, up 47%, and operating profit of $248 million grew 37%. Segment margin remained healthy at 25%.
Card Issuing Services' revenue and operating profit were $620 million and $154 million, respectively. The Card team's focus on smooth conversions has brought the total new accounts converted for the year to 51 million. The total pipeline stands at approximately 50 million accounts, of which more than 40 million are scheduled to be converted by the end of the first quarter 2005.
During the quarter, the company repurchased 28.4 million shares of stock for $1.2 billion at an average price of $42.34 per share. Yesterday, the board approved an additional $1.5 billion in new authorization bringing the company's current authorization for stock repurchases to nearly $2 billion.
Conference Call and Webcast
First Data will hold a conference call today at 8:00 a.m. EDT to discuss the company's third quarter and year-to-date results. Charlie Fote, chairman and chief executive officer; Kim Patmore, executive vice president and chief financial officer; and David Banks, senior vice president of Investor Relations will host the call. The call will be open to the public. The conference call can be accessed by calling 888-831-9087 in the U.S. or 312-470-7052 internationally and passcode: FDC. This call also will be broadcast on the company's Web site at www.firstdata.com. Interested parties are encouraged to click on the webcast link 10-15 minutes prior to the start of the conference call.
A replay of the conference call and the webcast will be available one hour after the call concludes through 5:00 p.m. EDT Oct. 21, 2004. The replay of the call is available at 866-418-8377 in the U.S. or 203-369-0749 internationally (no passcode required), and a replay of the webcast is available at www.firstdata.com.
Please note: All statements made by First Data officers on this call are the property of First Data and subject to copyright protection. Other than the replay, First Data has not authorized, and disclaims responsibility for, any recording, replay or distribution of any transcription of this call.
About First Data:
First Data Corp. (NYSE: FDC - News), with global headquarters in Denver, helps power the global economy. As a leader in electronic commerce and payment services, First Data serves approximately 3.5 million merchant locations, 1,400 card issuers and millions of consumers, making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment. With more than 30,000 employees worldwide, the company provides credit, debit, private-label, smart and stored-value card issuing and merchant transaction processing services; Internet commerce solutions; money transfer services; money orders; and check guarantee and verification services. The STAR® Network offers PIN-secured debit acceptance at one million point-of-sale locations and 260,000 ATMs nationwide. First Data also offers a variety of payment services to businesses around the world including those in the United Kingdom, Australia, Canada, Japan, Mexico, Spain, Panama, Brazil, China, the Netherlands, the Middle East and Germany. Its Western Union and Orlandi Valuta money transfer networks include approximately 202,000 agent locations in more than 195 countries and territories. Visit www.firstdata.com for more information.
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