Fiserv, (NASDAQ: FISV), the leading global provider of financial services technology solutions, today reported financial results for the fourth quarter and full year 2009.
Total GAAP revenue in the fourth quarter was $1.06 billion compared with $1.04 billion in 2008. Total adjusted revenue increased 2 percent to $1.01 billion in the quarter compared with $984 million in 2008. Total GAAP revenue for the year was $4.08 billion compared with $4.59 billion in 2008. Total adjusted revenue for the year decreased 1 percent to $3.87 billion compared with $3.89 billion in 2008.
GAAP earnings per share from continuing operations for the fourth quarter were $0.83 compared with $0.50 in 2008. Total GAAP earnings per share, including discontinued operations, were $0.76 for the fourth quarter compared with $0.39 in 2008. GAAP earnings per share from continuing operations were $3.04 for the year compared with $2.20 in 2008. Total GAAP earnings per share, including discontinued operations, were $3.06 for the year compared with $3.49 in 2008.
Adjusted earnings per share from continuing operations in the fourth quarter increased 6 percent to $0.94 compared with $0.89 in 2008. For the year, adjusted earnings per share increased 10 percent to $3.66 compared with $3.33 in 2008. Adjusted internal revenue grew 2 percent in the fourth quarter and declined 1 percent for the year.
"We finished the year with a strong fourth quarter highlighted by positive revenue growth, record December sales and superior free cash flow providing momentum as we enter the new year," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "In a challenging 2009, we delivered on our financial goals and enhanced our strategic position. These results reflect our industry-leading commitment to clients and the value of our integrated product offerings."
Fourth Quarter Highlights
* Adjusted internal revenue growth was 2 percent in the quarter, including 2 percent growth in the Payments segment. The Payments segment generated more than 50 percent of the company's adjusted revenue in the quarter and the full year;
* Free cash flow increased 11 percent in 2009 to a record $668 million;
* Company-wide adjusted operating margin increased 110 basis points in 2009 to 28.7 percent for the year, and declined 20 basis points to 28.1 percent in the quarter compared with the fourth quarter of 2008. The decline in the adjusted operating margin in the quarter was primarily related to an increase in the amount of the company's discretionary profit sharing accrual compared to 2008;
* Adjusted operating margin in the Payments segment increased 170 basis points in 2009 to 31.7 percent and 80 basis points to 32.1 percent in the quarter compared with the fourth quarter of 2008, primarily due to growth in higher-margin revenue and continued operational efficiencies associated with the CheckFree acquisition;
* The Financial segment operating margin increased 190 basis points in 2009 to 29.3 percent and 90 basis points to 28.5 percent in the quarter compared with the fourth quarter of 2008, primarily due to favorable business mix, ongoing cost efficiencies and strength in the account processing business;
* The company continued to expand its payments footprint by signing 113 electronic bill payment clients in the quarter and 407 clients for the year. The company also added 51 debit clients in the fourth quarter, for a total of 215 new clients in 2009;
* The company completed the previously announced dispositions of its Loan Fulfillment Solutions business and the final portion of the Fiserv ISS business in the fourth quarter of 2009;
* For the fifth time in the last six years, Fiserv was ranked number one on the FinTech 100 by IDC Financial Insights, American Banker and Bank Technology News;
* The company repurchased 1.1 million shares of its common stock in the quarter and 4.1 million shares in 2009. The company also repaid $140 million of debt in the quarter and $475 million in 2009;
* The number of accounts using the market-leading Investment Services APLSM platform topped three million for the first time in its history;
* The company signed a number of new and expanded client relationships in the quarter:
- Bank of the West, a $64 billion institution based in San Francisco, California, recently enhanced its online banking service with the Voyager® Consumer Banking solution from Fiserv. The bank is currently implementing CheckFree® RXPSM, a bill pay solution from Fiserv, to further enhance its online service by tightly integrating online banking and bill pay into a more seamless and intuitive online experience for their customers, driving greater adoption, retention and profitability. The bank also utilizes lending and item processing solutions from Fiserv.
- Christian Community Credit Union, a $520 million institution based in San Dimas, California, will become the first U.S. credit union to implement the AcumenTM account processing solution from Fiserv. Leaders for Christian Community chose Acumen because of the platform's flexible, modern architecture and its ability to support commercial accounts, which are important to serving the credit union's 30,000 members.
- Desert Schools Federal Credit Union, a $3 billion institution headquartered in Phoenix, Arizona, signed a multi-year agreement with Fiserv for the award-winning CheckFree RXP bill payment and presentment solution. Desert Schools FCU has 360,000 members and more than 60 locations.
- First Bank, a $10.8 billion institution headquartered in Clayton, Missouri, signed a multi-year agreement for Corillian® Online, CheckFree RXP and Mobile MoneyTM from Fiserv.
- Mutual of Omaha Bank, a full-service bank with $4 billion in assets, implemented the SignatureTM bank platform from Fiserv. In addition to this Fiserv account processing solution, the bank chose a suite of Fiserv solutions including online banking, online bill payment, commercial cash management, EFT, card management, item processing, content management, treasury management, and risk and performance management solutions.
- Space Coast Credit Union, a $3.1 billion institution headquartered in Melbourne, Florida, signed a multi-year agreement with Fiserv. With 360,000 members, 61 branches and 140 ATMs, Space Coast will operate account processing, online banking, EFT, debit, credit and ATM solutions from Fiserv.
- Tesco Bank, the largest supermarket bank in the United Kingdom, with more than six million customers and 28 financial products and services, selected Fiserv to provide its account processing solution with the Signature bank platform.
- Wells Fargo Bank, the fourth largest financial institution in the United States with $1.2 trillion in assets, signed an agreement for a bundle of Payments Software Solutions from Fiserv. Building on a foundation of an already successful partnership, the bank has also enhanced its agreement for check clearing and settlement using the Fiserv Clearing Network.
- Westoba Credit Union in Brandon, Manitoba selected the Acumen account processing solution from Fiserv. Westoba has $900 million in assets and serves 34,000 members from 21 locations throughout western Manitoba. The credit union will also implement ConvergeIT® and the IVR audio response system and solutions from the WisdomTM accounting suite from Fiserv.
Outlook for 2010
Fiserv expects 2010 adjusted internal revenue growth to be in a range of 1 to 3 percent. The company expects its 2010 adjusted earnings per share from continuing operations to be in a range of $3.96 to $4.07, which represents growth of 8 to 11 percent compared with the $3.66 earned in 2009. The adjusted earnings per share outlook excludes the impact of extraordinary gains or charges, merger and integration costs, and the amortization of acquisition-related intangible assets.
"The strong finish to 2009 is another proof point that our strategy is working. Although we believe the environment in 2010 will remain tough, we expect to grow revenue, earnings and free cash flow while continuing to invest in solutions that will help our clients to be even more successful," said Yabuki.
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