First Data's quarterly loss of $337 million is biggest in 2 years

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Posted: Wednesday, May 1, 2013 12:00 am

First Data on Tuesday said its first-quarter profitability fell short of its expectations, with a net loss of $337 million, its biggest quarterly loss in two years. Changes in income tax expenses accounted for most of the difference compared with a loss of $153 million a year ago.

Revenue was flat at $2.6 billion, with the firm saying it anticipates a “moderately improving” top line in the third and fourth quarters.

Earnings before interest, taxes, depreciation and amortization fell 6 percent to $520 million. Chief Financial Officer Ray Winborne said last year's 17 percent first-quarter growth in EBITDA would have been hard to surpass. Still, “our profitability fell short of the mark,” Winborne said.

The Atlanta payment processing firm with 5,000 employees in Omaha saw growth in its retail and alliance services segment, with revenue up 2 percent, including growth in the number of consumer transactions and in average ticket growth.

But that was offset by a decline of 4 percent in the financial services segment, where First Data said new business and volume growth were offset by lost business and lower prices. In financial services, recent layoffs, including 60 in Omaha, were among some “targeted cost reductions.” Winborne said he expects to bring earnings back to 2012 levels in this segment later in the year.

The company is privately held and reports earnings figures because it has publicly traded debt.

First Data said it has improved its debt situation and has “plenty of headroom,” with no significant debt maturing until 2016.

In February and April the company took on new debt to pay off existing notes and refinanced other debts at lower interest rates. Since August 2010, Winborne said, First Data has extended due dates on $20 billion in debt to 2017 and beyond.

Contact the writer:

402-444-1336, barbara.soderlin@owh.com

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