Fiserv, Inc. (NASDAQ: FISV), the leading global provider of financial services technology solutions, today reported financial results for the fourth quarter and full year 2010.
GAAP revenue in the fourth quarter of 2010 was $1.08 billion compared with $1.06 billion in the fourth quarter of 2009. Adjusted revenue increased 2 percent to $1.03 billion in the fourth quarter compared with $1.01 billion in 2009. For the full year, GAAP revenue was $4.13 billion compared with $4.08 billion in 2009, and adjusted revenue increased 1 percent from $3.87 billion in 2009 to $3.93 billion in 2010.
GAAP earnings per share from continuing operations for the fourth quarter was $0.80, which includes a loss from early debt extinguishment of $0.11 per share, compared with $0.83 in 2009. GAAP earnings per share from continuing operations for the full year was $3.34 compared with $3.04 in 2009.
Adjusted earnings per share in the fourth quarter increased 13 percent to $1.06 compared with $0.94 in 2009. Full year adjusted earnings per share increased 11 percent to $4.05 compared with $3.66 in 2009.
"We delivered on our commitments of returning to positive revenue growth while increasing earnings and generating a record level of free cash flow," said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. "Our strong performance is the result of our associates delivering for clients every day."
Fourth Quarter and Full Year 2010
* Adjusted internal revenue growth was 2 percent in the quarter, reflecting 3 percent growth in the Payments segment and 2 percent growth in the Financial segment. For the full year, adjusted internal revenue growth was 1 percent; the Payments segment grew 3 percent and the Financial segment was up less than 1 percent.
* Adjusted operating margin increased 160 basis points to 29.7 percent in the quarter over the prior year period. For the full year, adjusted operating margin increased 70 basis points compared with 2009 to 29.4 percent.
* Free cash flow increased 10 percent to a record $735 million in 2010 compared with $668 million in 2009.
* The company repurchased 2.9 million shares of common stock in th
*hares of common stock in th
* The company repurchased 2.9 million shares of common stock in the quarter for $164 million. In 2010, the company repurchased 8.1 million shares for a total of $418 million. As of December 31, 2010, the company had approximately 6 million shares remaining under its share repurchase authorization.
* Fiserv was ranked first in North America and fourth in the world in Chartis Research's RiskTech100TM 2010, a comprehensive annual study of the top global technology firms active in risk management.
* The company expanded its payments footprint in the quarter by signing 163 electronic bill payment clients and 55 debit clients. The company signed 537 electronic bill payment clients and 218 debit clients in the year.
* 176 clients committed to offer ZashPay® in the quarter, the new person-to-person payments service from Fiserv. As of December 31, 2010, more than 600 financial institutions have agreed to offer the service.
* In the fourth quarter, the company received an $89 million cash payment, reflecting a dividend and the repayment of a loan, from StoneRiver Group, L.P., a company in which Fiserv owns a 49% interest.
* On January 3, 2011, Mark Ernst joined the company as its Executive Vice President and Chief Operating Officer. Ernst's background spans more than 25 years in the financial services industry and includes senior management positions with the Internal Revenue Service, H&R Block, Inc. and the American Express Company.
* The company signed a number of new and expanded client relationships in the quarter:
o Associated Bank, headquartered in Green Bay, Wis. with total assets of $22 billion, expanded its existing Fiserv relationship with the selection of Mobile Money™ for mobile banking and ZashPay for person-to-person payments. The bank already utilizes the Signature™ bank platform for account processing, along with additional solutions including online banking and bill payment, Bank Intelligence Solutions®, asset liability risk management and mortgage loan servicing.
o Austin Bank, headquartered in Jacksonville, Texas, with more than $1 billion in assets, will implement a full suite of Fiserv debit solutions including processing, Premier Analytics™, Risk OfficeSM, ATM driving and enhanced chargebacks.
o Central Bank, a $2.1 billion financial services holding company headquartered in Lexington, Ky., extended its relationship with Fiserv for the Signature bank platform, EFT and Nautilus® from Fiserv. The bank also has added eight new solutions, including Corillian® Online, CheckFree® RXP® and Mobile Money from Fiserv to provide integrated banking, bill payment and personal financial management to retail banking customers through the online and mobile channels.
o Diebold, Incorporated, the global leader in providing integrated self-service delivery and security systems and services, has continued its long-term partnership with Fiserv utilizing the Fiserv Source Capture Solutions® Image Toolkit. Diebold, headquartered in North Canton, Ohio with $2.7 billion in worldwide revenue, leverages the Fiserv technology for use within its image-enabled ATMs.
o Fort Financial Credit Union of Fort Wayne, Ind., signed an agreement to implement the XP2® account processing solution from Fiserv to help serve its nearly 47,000 members. The $180 million credit union will implement an integrated suite of Fiserv solutions that includes CheckFree RXP for electronic bill payment; ConvergeIT®: IVR for audio response; Nautilus for enterprise content management; Virtual Branch® for online banking; and Wisdom™ for accounting.
o Gesa Credit Union of Richland, Wash., agreed to implement AcumenTM from Fiserv, the company's newest account processing solution for credit unions. Gesa, which has $1 billion in assets and serves more than 97,000 members, will implement additional Fiserv solutions, including Nautilus for enterprise content management and ATM Source Capture™, Branch Source Capture™ and Teller Source Capture™ solutions.
o IBERIABANK, headquartered in Lafayette, La., with $10 billion in assets, will implement a full suite of Fiserv debit solutions including processing and enhanced chargebacks, Premier Analytics, CardVisionSM and ATM driving. In addition, the bank will use the ACCEL/Exchange® PIN debit network from Fiserv.
o Kawartha Credit Union of Ontario, Canada, with $700 million in assets, agreed to implement Acumen from Fiserv to meet the needs of its nearly 37,000 members. The credit union will also implement additional Fiserv solutions including ConvergeIT: IVR from Fiserv for audio response, Prologue™ General Ledger, Prologue Fixed Assets and Vantage™ Risk and Budgeting Manager.
o Kennebec Savings Bank, a $776 million savings bank based in Augusta, Maine, selected a complete banking solution from Fiserv based on the Premier bank platform with approximately 20 integrated products. The solution includes business and consumer online banking, CheckFree RXP for bill payment, Mobile Money for mobile banking, Source Capture, fraud and anti-money laundering, Card Services and the ACCEL/Exchange® Network for debit processing.
o Zions Bancorporation, one of the nation's leading financial services companies with $53 billion in assets and more than 500 banking offices in the western U.S., is making Check Recovery from Fiserv available to its business customers. This electronic check re-presentment service streamlines and accelerates the recovery of bad checks and lost funds by automating the collection process. Zions Bancorporation, a longstanding client, also uses account processing, bill payment, ACH processing, cash supply chain management, risk and compliance and remittance solutions from Fiserv.
Outlook for 2011
Fiserv expects 2011 adjusted internal revenue growth to be in a range of 2 to 4 percent. The company also expects 2011 adjusted earnings per share to be in a range of $4.42 to $4.54, which represents growth of 9 to 12 percent compared with $4.05 in 2010.
"Strong sales to new and existing clients reflects our focus on creating value for clients," said Yabuki. "The investments we are making in our industry-leading solutions are building momentum for 2011 and beyond."