The company's consolidated revenue was $2.9 billion, up 10%. Net income was $436 million, or $0.56 per share. Earnings per share included a $0.01 net benefit from other items.

"Our second quarter results were driven by the strong performance of both our Commercial and International segments. As we approach the spin-off, we are very encouraged by the momentum that the new First Data is building toward achieving the high-end of its long-term targeted 8-10% top and bottom line growth," said Ric Duques, chairman and chief executive officer. "Furthermore, the strength of Western Union's brands and global reach firmly positions the company for continued long-term growth and we remain extremely confident in its future as a stand-alone company."

Segment Results

For the quarter, Western Union generated revenue of $1.1 billion, a 15% increase, and operating profit was $352 million, up 9%. Profit margin remained strong at 31.2%. While Western Union's performance this quarter was impacted by consumer reaction to immigration reform activities in the U.S., the strength of the brand worldwide and the geographic diversity of Western Union continue to drive the strong performance of its global consumer-to-consumer business. Consumer-to-consumer transaction growth was 27%. Consumer-to-consumer revenue increased 17%. The consumer-to-business service delivered transaction growth of 11% and revenue growth of 4%.

For the quarter, Commercial Services generated revenue of $1.0 billion, a very strong 11% growth or 9% excluding reimbursable debit network fees. Operating profit was $277 million, up a strong 27% or 12% excluding integration expense from 2005. Margin for the quarter improved to 26.9% from 23.4%, or to 33.3% from 32.3% excluding reimbursable debit network fees and 2005 integration costs. Second quarter results were driven by a continued focus on sales, operating cost efficiencies and strong transaction growth of 13%.

For the quarter, Financial Institution Services generated revenue of $452 million, down 6%. Operating profit was $95 million, down 11%. Margin for the quarter declined to 20.9% from 22.0%, or to 31.2% from 32.0% excluding reimbursables. Results were in line with the company's expectations, which anticipated the impact of three significant client deconversions in 2005.

For the quarter, First Data International generated revenue of $299 million, up 41% and revenue growth on a constant currency basis excluding acquisitions was 15%. Operating profit was $34 million, up 43%. Margin improved to 11.2% from 11.0%. "We continue to be very pleased with the underlying performance of our International segment and the growth it continues to generate," Duques added.

Outlook for 2006

"We remain within our previously stated full-year EPS guidance from continuing operations of $2.35-$2.42, which now includes the positive impact of the litigation settlement with VISA, of approximately $0.035. If U.S. immigration issues continue to impact the Western Union business at the same rate in the second half of the year, we would expect to deliver full-year EPS at the low end of the range, not including the benefit of the $0.035 from the litigation settlement. The full-year guidance excludes future spin costs and any impact from the spin-off, as we are currently unable to reasonably estimate these items," said Ric Duques. "The company is on track to complete the spin-off sometime in the late third quarter or early fourth quarter of 2006 and as a result we will not update guidance until the planned investor road shows in September, at which time guidance will be provided by the two companies."Download the document now 57.9 kb (Adobe Acrobat Document)