Fidelity National Information Services Inc. (FIS), Tuesday reported a sharp decline in second quarter profit hurt by lower revenues from International and Financial solution segments. Quarterly revenues were down 4.0% negatively impacted by exchange rates. On an adjusted basis, profit, however, rose from last year, based on which, Fidelity National lifted its full year 2009 earnings from its earlier provided guidance.
For the second quarter, GAAP net earnings attributable to common stockholders plunged to $59.6 million or $0.31 per share from $72.8 million or $0.37 per share in the same period a year ago.
Net earnings from continuing operations of the Jacksonville, Florida-based company was $60.0 million or $0.31 per share, compared to $13.6 million or $0.07 per share in the year-earlier quarter.
On a non-GAAP basis, net earnings rose 23.5% to $0.42 per share, compared to $0.34 in the prior year, and increased 26.5% in constant currency, helped by operating performance across all major business lines and lower net interest expense.
On average, twelve analysts polled by Thomson Reuters expected earnings of $0.36 per share for the quarter. Analysts' estimate typically excludes one-time items.
Consolidated revenue dropped 4.0% to $834.8 million from $869.7 million in the prior-year quarter. Excluding a $31.2 million unfavorable impact of foreign currency resulting from a strengthening of the U.S. dollar, consolidated revenue declined 0.4%. The Street expected revenues of $832.44 million for the quarter.
In the immediately preceding first quarter, Fidelity National's profit plunged to $33.0 million or $0.17 per share on lower processing and services revenues. Processing and services revenues for the quarter declined 3.9% to $797.8 million.
Amongst others in the industry, information management systems provider Fiserv Inc. (FISV), reported a drop in first quarter profit with earnings of $103 million or $0.66 per share, hurt by weaker processing and services and product sales. Revenue for the quarter were down at $1.04 billion.
For the quarter under review, Financial Solutions revenue of Fidelity National declined 1.4% to $277.0 million hurt by higher demand for risk management and technology outsourcing services, offset by lower software license and professional services revenue.
Payment Solutions revenue declined 0.9% to $380.0 million, as growth in debit was offset by declines in item processing, credit card and retail check services.
International revenue declined 13.7% to $178.4 million driven by the strengthening of the U.S. dollar and exceptionally strong revenue in the second quarter of 2008. International revenue increased 1.4% in constant currency.
Operating income was $117.4 million, up from $57.9 million in the comparable quarter last year.
For the six-month period, net earnings attributable to Fidelity National shareholders plunged to $92.2 million or $0.48 per share from $142.4 million or $0.73 per share in the prior-year period. Revenue dropped to $1.63 billion from $1.70 billion in the year-ago period. Non-GAAP net income attributable to Fidelity National was $137.2 million or $0.72 per share for the period.
Lee Kennedy, president and chief executive officer. "Based on results to date and our outlook for the remainder of 2009, we are increasing our full year earnings outlook to $1.71 to $1.75 per share from our previous guidance of $1.60 to $1.66 per share."
Fidelity National also said it expects constant currency revenue to increase modestly in 2009 compared to 2008, and expects reported revenue to decline slightly compared to 2008.
On April 1, 2009, Fidelity National announced plans to acquire Metavante Technologies, Inc. (MV ), which is expected to close in the fourth quarter of 2009. Full year guidance, however, does not include Metavante's operating results, which will be updated later, following the completion of transaction.
On April 17, 2009, brokerage Oppenheimer Upgraded Fidelity shares to 'Outperform' from 'Perform', with a Mean target of $21.94.
FIS closed Tuesday's regular trading at $21.42, down $0.13 or 0.60%, on a volume of 1.76 million shares. In after-hours, the stock further dropped $0.13 or 0.60%, to trade at $21.42. In the last-52 week period, the stock traded in the range of $11.15 to $23.65, with a three-month average volume of 2.77 million shares.
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