Fiserv Q1 income rises

Total GAAP revenue in the first quarter of 2010 was $1.01 billion compared with $1.02 billion in the first quarter of 2009. Total adjusted revenue decreased 1 percent to $954 million in the first quarter compared with $968 million in 2009.

GAAP earnings per share from continuing operations for the first quarter was $0.80 compared with $0.68 in 2009. Total GAAP earnings per share, including discontinued operations, was $0.79 for the first quarter compared with $0.66 in 2009. Adjusted earnings per share from continuing operations in the first quarter increased 6 percent to $0.95 compared with $0.90 in the first quarter of 2009.

"Solid performance by our recurring revenue-based businesses in the quarter produced financial results inline with our expectations," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "We are funding new product investments in several strategic areas to provide innovation the market demands, while delivering value for our shareholders in the short and long term."

First Quarter 2010

-- Total adjusted revenue decreased 1 percent in the quarter to $954 million compared with the first quarter of 2009, due primarily to a decrease in project revenue in the company's Output Solutions division, lower license and consulting revenue, and volume declines in check processing.

-- The company's adjusted operating margin declined 20 basis points to 28.9 percent in the quarter compared to the first quarter of 2009, which was the company's highest margin quarter of 2009. The slight decline in operating margin resulted primarily from decreases in higher margin revenue and planned investments in new products. Adjusted operating margin in the quarter increased 80 basis points sequentially.

-- Free cash flow increased 15 percent over the prior year period to a record quarterly level of $225 million.

-- On March 1, 2010, the company announced that its Board of Directors authorized the repurchase of an additional five million shares of the company's common stock. During the quarter, the company repurchased 1.4 million shares for $67 million and has 5.8 million shares remaining under its existing repurchase authorizations as of March 31, 2010.

-- The company continued to expand its consumer payments footprint in the quarter by signing 93 electronic bill payment clients and 46 debit clients, of which the majority were competitive takeaways.

-- The company signed a number of new and expanded client relationships in the quarter: -- American Bank of Texas, a $1.1 billion institution based in Sherman, Texas, selected Reservelink(R) from Fiserv to fully automate its deposit reclassification processes and generate additional investment income by enhancing the management of reserve requirements and non-earning assets. The bank also utilizes Merchant Source Capture(TM) and Consumer Source Capture(TM) solutions from Fiserv.

-- The Charles Schwab Corporation launched six new managed portfolios of exchange-traded funds in Schwab Managed Portfolios(TM) ETFs, leveraging the Investment Services technology platform from Fiserv. Schwab services 7.8 million client brokerage accounts and $1.49 trillion in client assets from 300 offices globally.

-- Coastal Federal Credit Union, a $2.1 billion institution with 195,000 members headquartered in Raleigh, North Carolina, expanded their relationship with Fiserv to include the CheckFree(R) RXP(R) online bill payment and presentment solution. Coastal, which already utilizes account processing and online banking solutions from Fiserv, also plans to implement the financial overview experience which combines online banking and bill payment functionality into a single, integrated user portal.

-- First National Bank Alaska, the largest locally owned and operated bank in Alaska, expanded its relationship with Fiserv. With 30 branches in 18 communities throughout the state, First National will integrate Fiserv's debit solutions into its account processing platform, Premier(R) from Fiserv.

-- Home Federal Bank, headquartered in Nampa, Idaho, agreed to implement the Precision(TM) bank platform from Fiserv. With 22 full-service banking offices and one commercial loan center, the bank also will use additional Fiserv solutions including the Fiserv Clearing Network, CheckFree RXP, WireXchange(R), Prologue(TM) modules, EFT Processing and AML Manager.

-- Lambton Financial Credit Union Limited of Sarnia, Ontario chose the advanced Acumen(TM) account processing platform from Fiserv, citing its integrated loan processing capability as essential to the credit union's growth strategy. The state-of-the-art Canadian service bureau, and feature-rich functionality of Acumen, also were key considerations that led Lambton to become the 15th Canadian credit union to choose Acumen for core banking since January 2008.

-- SunTrust Banks, Inc., headquartered in Atlanta and one of the nation's largest banking organizations with $174 billion in assets, expanded its relationship with Fiserv. SunTrust selected Mobile Money(TM) from Fiserv to provide clients with a broader range of mobile account access options, supporting the bank's overall mobile financial services strategy.

-- The Union Bank Company, located in Columbus Grove, Ohio, selected the Premier bank platform and outsourced processing services from Fiserv. Additionally, the bank chose a suite of complementary Fiserv solutions to introduce innovative new services to its customers. The suite includes eCom(TM) and eCorp (TM) for Premier, CheckFree RXP, Mobile Money, Branch Source Capture(TM) and other solutions. The Union Bank Company is a subsidiary of United Bancshares, Inc. /quotes/comstock/15*!uboh/quotes/nls/uboh (UBOH 9.56, +0.00, +0.04%) , which had $616 million in assets as of December 31, 2009.

-- United Central Bank (UCB), a $2.6 billion asset institution based in Garland, Texas selected the Premier bank platform from Fiserv for outsourced account processing. Recognized as the "2010 Large 7(a) Lender of the Year" by the Small Business Administration, UCB chose more than 15 complementary Fiserv solutions, including online banking, bill payment, EFT, item processing, anti-money laundering and Branch Source Capture for its 32 locations in 8 states.

-- United Prairie Bank, with $526 million in assets and 15 locations across Minnesota, has expanded a 25-year relationship with Fiserv by choosing the Premier bank platform and outsourced processing services from Fiserv. In addition, the bank selected solutions such as online banking and bill pay, EFT, the Fiserv Clearing Network and Merchant Source Capture.

-- U.S. Bancorp, with $282 billion in assets and the parent company of U.S. Bank, the fifth largest commercial bank in the United States, signed a multi-year renewal agreement with Fiserv for CheckFree RXP, the market leading bill payment and presentment solution.

Outlook for 2010

Fiserv continues to expect full year 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 2009. The company also expects 2010 adjusted internal revenue growth to be in a range of 1 to 3 percent. The adjusted earnings per share outlook excludes the impact of extraordinary items, merger and integration costs, and the amortization of acquisition-related intangible assets.

"We expect momentum from the combination of our strong business model and an intense focus on market opportunities to accelerate revenue and earnings growth throughout the year, consistent with our 2010 guidance," said Yabuki.