First Data reviews US card issuing business; cuts 2005 outlook
09 November 2005 | 4632 views | 0
First Data is looking to shed its under-performing US credit card issuing business, which it says is a drain on the entire company's financial results. The news comes as the vendor cuts it earnings forecast for 2005 again.
In a statement First Data says it has hired Morgan Stanley to help explore options for the US credit card unit.
Charlie Fote, chairman and chief executive officer, First Data says: "This business continues to dampen the growth rates of the entire company, and maximising shareholder value over the long term remains our top priority."
The vendor says it expects the business to continue hurting its overall growth rates through the middle of 2006.
Taking into account October operating results and delays in closing acquisitions, First Data says it now expects full-year earnings of $2.14 to $2.16 a share for 2005, and says final fourth quarter results will be heavily influenced by consumer spending during the Thanksgiving to Christmas season.
First Data previously cut its 2005 outlook in August, to a profit of $2.19 to $2.23 per share, from a previous forecast of $2.23 to $2.32 per share.
The vendor's shares fell $1.41 to $41.10 on the New York Stock Exchange on the news.