Wednesday, Fidelity National Information Services Inc. (FIS) reported a higher third-quarter profit helped by improved operating performance across all major business lines. Quarterly revenues were down 3.8%, negatively impacted by exchange rates. Adjusted profit rose 12.2% from last year, but missed Street estimate by a cent.
The Jacksonville, Florida-based company reported net income attributable to FIS common stockholders for the third quarter of $67.6 million or $0.35 per share, compared to $43.6 million or 0.23$ per share in the year-ago quarter.
Non-GAAP net income attributable to common shareholders was $90.2 million or $0.46 per share, compared to $78.2 million or $0.41 per share in the same quarter last year.
Non-GAAP net income for the quarter increased 12.2% year-over-year, and increased 14.6% in constant currency. The increase was attributed primarily to improved operating performance across all major business lines, which offset a higher average share count in the third quarter of 2009.
On average, fifteen analysts polled by Thomson Reuters expected the company to earn $0.47 per share for the quarter. Analysts estimates typically exclude special items.
Consolidated revenues for the quarter decreased 3.8% to $850.7 million from $884.0 million in the prior-year quarter. Excluding a $16.8 million unfavorable impact of foreign currency, consolidated revenue declined 1.9%, primarily due to lower license and professional services revenue, coupled with nonrecurring interchange adjustments and card marketing revenue recorded in the prior year quarter. Fourteen analysts had a revenue consensus of $869.61 million for the third quarter.
In the immediately preceding first quarter, Fidelity National's profit plunged to $59.6 million or $0.31 per share on lower revenues from International and Financial solution segments. Consolidated revenue for the quarter dropped 4.0% to $834.8 million.
Amongst others in the industry, information management systems provider Fiserv Inc. (FISV), is scheduled to report third quarter financial results on October 27. Street analysts currently expect the company to report earnings of $0.92 per share on revenues of $1.06 billion for the company's third quarter.
For the quarter under review, Financial Solutions revenue of Fidelity National declined 7.3% to $278.2 million compared to $300.2 million in the prior period, hurt by lower software license and professional services revenue.
Payment Solutions revenue declined 5.0% to $369.5 million, due to ongoing weakness in consumer spending and lower item processing volumes. The growth rate was also impacted by a nonrecurring interchange adjustment and particularly strong card marketing revenue in the third quarter of 2008.
International Solutions revenue grew 4.1% to $203.5 million and 12.7% in constant currency, compared to $195.4 million in the prior year quarter. Core processing revenue increased 14.3% driven by strong services revenue and volumes in Asia Pacific and EMEA, while payments revenue increased 11.8% driven by organic account growth across all regions.
Commenting on the results, the company's executive chairman, William Foley, II said, "While revenue growth remains challenging in the current economic environment, we continue to drive strong margin expansion, double-digit growth in earnings per share and excellent free cash flow. We are confident in our ability to drive solid organic top line growth and realize strong operating leverage when the banking industry recovers."
On October 1, Fidelity National completed the acquisition of Metavante Technologies, Inc. (MV) to form a new corporate identity known as FIS. Fidelity National indicated the combination as the world's largest provider of banking and payments technology. The company noted that Metavante's operations will be included in the FIS results prospectively, beginning in the fourth quarter of 2009.
For the nine-month period, net earnings attributable to Fidelity National shareholders plunged to $159.8 million or $0.83 per share from $186.0 million or $0.96 per share in the prior-year period. Non-GAAP net income attributable to Fidelity National was $227.4 million or $1.19 per share for the period. Revenue dropped to $2.48 billion from $2.58 billion in the year-ago period.
FIS closed Wednesday's regular trading at $24.83, down $0.32 or 1.31%, on a volume of 5.09 million shares. In the last-52 week period, the stock traded in the range of $11.15 to $26.00, with a three-month average volume of 3.31 million shares.
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