First Data Engages Strategic Review Of Card Issuing Ops
DOW JONES NEWSWIRES
November 9, 2005 9:52 a.m.
DENVER -- First Data Corp. (FDC) said it hired Morgan Stanley to assist the company in exploring strategic options for its U.S. credit-card business.
"This business continues to dampen the growth rates of the entire company," said First Data Chairman and Chief Executive Charlie Fote.
In addition, the e-commerce and payment services company cut its full-year earnings forecast, citing operating results for the October period and delays in closing previously announced acquisitions.
In October, when First Data reported a 6% third-quarter revenue increase, revenue for its card-issuing unit, which includes debit, retail and bank cards and related services, fell 4%. The card segment's operating profit was $116 million for the quarter, down 25% from a year earlier.
At the time, Fote said the company's results continued to be dampened by the card-issuing unit, adding the unit's performance remained a top priority.
For the full year, First Data said it now anticipates net income of $2.14 to $2.16 a share, down from August guidance of $2.19 to $2.33 a share.
A Thomson First Call survey of analysts, on average, expects the company to earn $2.30 for the year, up from $2.23 a year earlier.
In a preliminary 2006 forecast, the company said it expects revenue growth and operating margins for its Western Union money transfer business to be in-line with 2005.
For Merchant Services, the company expects revenue growth in the low to mid-teens, with profit growth in the mid to high-teens.
Based on the timing of any actions taken at the card issuing unit, the company said the unit is expected to continue to hamper its consolidated growth rates through the middle of 2006.
Company Web site: firstdata.com |
