US banking technology giant Fiserv is retaining guidance for the coming year, as declines from its home equity processing business, and charges associated with merger activity and job cuts, impacted its first quarter earnings statement.
Total GAAP revenue was $1.04 billion for the first quarter of 2009 compared with $1.31 billion in 2008. Total adjusted revenue decreased three percent to $989 million for the first quarter of 2009 compared with $1.02 billion in 2008 as the ongoing financial crisis took its toll on the firm's home equity processing business where revenues decreased by $19 million $23 million.
GAAP earnings per share from continuing operations for the first quarter of 2009 were $0.65 compared with $0.60 for the first quarter of 2008. Adjustmens to reflect the effect of discontinued operations showed a 66% decline from a year ago, when the company reported gains from spinning off its insurance technology business.
The company also reported a $15 million pre-tax charge ($0.06 per share) in the first quarter of 2009 as it moved to cut 700 jobs from the payroll, representing 3.5% of the total workforce. Merger costs and other adjustments include integration project management, retention bonuses and other expenses associated with the acquisition of CheckFree.
Jeffery Yabuki, Fiserv president and CEO comments: "In spite of the expected revenue weakness in the quarter, we managed the business to optimize margins and grew adjusted earnings per share ten percent. In addition, we took proactive steps to increase our investments in several key areas that should enhance market differentiation and boost growth."
He says the company continues to expect full-year 2009 adjusted earnings per share from continuing operations to be within a range of $3.61 to $3.75, which represents growth of 10 to 14% compared with $3.29 in 2008. Revenue growth is forecast to be in a range of 0 to 4%.
"We are on track to achieve our full-year targets in a watershed year for the financial services industry," says Yabuki.