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Fiserv Reports Second Quarter 2013 Results

Stocks in this article: FISV

Fiserv, Inc. (NASDAQ: FISV), a leading global provider of financial services technology solutions, today reported financial results for the second quarter of 2013.

GAAP revenue in the second quarter was $1.20 billion compared with $1.09 billion in the second quarter of 2012. Adjusted revenue was $1.14 billion in the second quarter compared with $1.02 billion in 2012, an increase of 12 percent. For the first six months of 2013, GAAP revenue was $2.35 billion compared with $2.18 billion for the first six months of 2012. Adjusted revenue was $2.22 billion in the first half of 2013 compared with $2.04 billion in the same period in 2012, an increase of 9 percent.

GAAP earnings per share from continuing operations in the second quarter was $1.13 compared with $1.17 in the second quarter of 2012. GAAP earnings per share from continuing operations for the first six months of 2013 was $2.00, which included Open Solutions merger and integration expenses of $0.27 per share, compared with $2.11 for the first six months of 2012.

Adjusted earnings per share from continuing operations in the second quarter increased 18 percent to $1.50 compared with $1.27 in 2012. Adjusted earnings per share from continuing operations in the first six months of 2013 increased 16 percent to $2.83 compared with $2.45 in 2012.

“Our strong second quarter results included revenue and earnings acceleration in-line with our full-year expectations,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Performance was led by 7 percent adjusted internal revenue growth in our Payments segment, solid sales and excellent free cash flow.”

Second Quarter 2013

  • Adjusted revenue grew 12 percent in the quarter to $1.14 billion and increased 9 percent year-to-date to $2.22 billion over the prior year periods.
  • Adjusted internal revenue growth in the quarter was 4 percent for the company, driven by 7 percent growth in the Payments segment and 2 percent growth in the Financial segment.
  • Adjusted internal revenue grew 2 percent for the first six months of 2013, with 4 percent growth in the Payments segment. Financial segment adjusted internal revenue was flat compared to the first six months of 2012.
  • Adjusted earnings per share increased 18 percent in the quarter to $1.50 and increased 16 percent in the first six months of 2013 to $2.83, as compared to the prior year periods.
  • Free cash flow grew 22 percent in the first six months of 2013 to $359 million compared with $294 million in the prior year period.
  • Adjusted operating margin was 30.5 percent in the quarter, an increase of 110 basis points compared to the second quarter of 2012, and increased 50 basis points to 29.5 percent in the first six months of 2013, compared with the prior year period.
  • Sales performance year-to-date is up 9 percent compared with the first half of 2012.
  • The company signed five new DNA TM account processing clients in the quarter and 10 for the first half of the year.
  • The company received a $122 million cash distribution in the quarter from StoneRiver Group, L.P. (“StoneRiver”), a joint venture in which the company owns a 49% interest.
  • The company repurchased 2.3 million shares of common stock in the quarter for $204 million and 3.1 million shares through June 30, 2013 for $271 million. As of June 30, 2013, the company had 2.4 million shares remaining under its current share repurchase authorization.
  • The company signed 98 Mobiliti clients in the quarter, for a total of 188 for the year, and has added nearly 1,600 mobile banking clients to date.
  • The company signed 64 Popmoney ® clients in the quarter and the network now includes nearly 2,000 financial institutions.
  • The company signed 71 electronic bill payment clients and 38 debit processing clients in the quarter.

Outlook for 2013

Fiserv continues to expect 2013 adjusted revenue growth to be in excess of 10 percent, adjusted internal revenue growth to be in a range of 3 to 4 percent, and adjusted earnings per share to be in a range of $5.84 to $6.03, which represents growth of 15 to 19 percent over 2012.

”We are pleased with our performance in the quarter and believe we are on track to achieve our 2013 financial objectives,” said Yabuki.

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