First Data CEO: Concord Deal As Key As Western Union Buy
DOW JONES NEWSWIRES
January 27, 2005 5:35 p.m.
By Heather Draper
DENVER -- First Data Corp.'s (FDC) buy of Concord EFS Inc. in 2004 will be viewed 10 years from now as being just as important as First Data's buy of Western Union 10 years ago, First Data's chief executive said.
"The addition of Concord in 2004 had a very significant financial impact (on First Data), adding nearly $1.2 billion in revenue and about six billion new transactions," Chief Executive Charlie Fote told analysts during an earnings call Thursday.
First Data, a payment processing and money transfer company, acquired Concord EFS and its large debit network in February 2004, and integrated it into First Data's merchant services division.
Fote said 2004 "was a watershed year for First Data. I put it in the same category as 1992 when we first became public, as well as 1995, when Western Union first joined the First Data family."
First Data's Western Union unit drives the company's payment services segment, he said, contributing about 85% of payment services' revenue in 2004.
Western Union's revenue in the fourth quarter improved 15% from the year before to $908 million, the company said.
First Data, Greenwood Village, Colo., on Thursday reported fourth-quarter net income of $465.1 million, or 56 cents a share, up from the previous year's $401.6 million, or 55 cents a share.
The company's total revenue for the quarter rose 20% to $2.69 billion from $2.24 billion in the same period of 2003.
First Data shares recently traded down 95 cents, or 2.34%, at $39.69.
Fote told analysts that his company has "successfully predicted, and in many cases, driven changes" in the payments industry for the past 30 years.
"Our ability to capitalize on the growth opportunities that come from change can be measured in our financial performance day in and day out," Fote said.
In 1992, when First Data went public, the company's annual revenue was $1.2 billion, he said. In 2004, First Data's revenue was $10 billion, which produced $1.9 billion in net income, Fote said.
"Over the last five years, our operating cash has grown by 18% on a compounded growth basis and we've used this cash to buy back shares and pay dividends to the tune of about $7.9 billion," Fote said.
First Data forecasts that its core business will produce revenue growth of about 10% in 2005, Fote said, adding that the revenue growth will lead to per-share earnings (under generally accepted accounting principles) of $2.23 to $2.32 this year.
The company's 2005 capital expenditures will be in the $500 million to $600 million range, he said, and its cash flow from operations will be around $2.4 billion to $2.6 billion. |
