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CheckFree Raises Guidance, to Cut 450 Jobs

Kristen French

CheckFree(CKFR Quote) raised its quarterly earnings guidance and said it will cut 450 jobs, resulting in cost savings that will produce further earnings enhancement. Including the charges associated with the layoffs, however, the company will post a loss in the third quarter.

The Atlanta-based provider of electronic bill payment, banking and other online services, said it expects to earn 3 cents to 5 cents a share in the third quarter, slightly above analysts' forecasts, citing improved operating efficiency. The quarter ends March 31.

The company also expects lower costs, including the job cuts, to raise its fiscal fourth-quarter 2002 estimates by 3 cents a share and full-year 2003 estimates by 20 cents a share.

CheckFree said plans to consolidate offices and cut the jobs would result in a one-time restructuring charge of $14 million to $16 million in the third quarter, and about $30 million in annual savings. The company previously announced a separate $5 million charge to cover severance agreements, lease costs and intangible assets associated with putting an end to its financial planning products and closing the San Francisco arm of its Electronic Commerce division.

CheckFree said it still expects third-quarter revenue in the range of $119 to $124 million, and sequential quarterly subscriber growth of 4% to 6%.

"The business initiatives we announced today put us in a stronger position to leverage our scale efficiencies moving forward in our Electronic Commerce Division and to concentrate our resources in the most promising areas in our i-Solutions business unit," said CheckFree President and Chief Operating Officer Pete Sinisgalli.