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Alliance Data Systems 1Q Profit Slips 43 Percent

The Associated Press

DALLAS (AP) — Alliance Data Systems Corp. said Wednesday its first-quarter profit fell by 43 percent as the marketing and transaction services company's revenue declined, partly due to the impact of the stronger dollar on overseas revenue.

The company posted earnings of $27.9 million, or 45 cents a share, in the three months ended March 31, compared with net income of $49.3 million, or 61 cents a share, in the same period a year ago.

But cash earnings per share, which strip out certain one-time items, totaled $1.19, up from $1 a year ago and above Wall Street's average forecast of $1.10 per share, according to a Thomson Reuters poll.

Revenue slipped 4 percent to $480.3 million, just missing analysts' $488 million estimate.

Management said it expects its Loyalty Services and Epsilon Marketing Services business units to do well this year, but noted that its Private Label Credit unit will continue to be hampered by the impact of higher credit losses, among other factors.

The company said it expects that the impact of foreign exchange rates will not be material to its results by the fourth quarter. It also expects credit losses will stabilize next year.

Looking ahead to the second quarter, traditionally the company's weakest, Alliance Data is projecting cash earnings per share of about $1.05, below Wall Street's $1.22 per share view. But management reiterated its full-year guidance for cash earnings per share of at least $5.15 — above analysts' $5.07 per share outlook.

Alliance Data Systems shares fell $1.07, or 2.6 percent, to close at $40.68 on Wednesday.