reported a big drop in third-quarter profits Monday, as results were weighed down by charges related to derivative accounting and the recent spinoff of its money-transfer unit,
Meanwhile, Western Union posted higher-than-expected jump in earnings, sending its shares up in after-hours trading.
First Data said its net income fell to $342.2 million, or 17 cents a share, from $516.6 million, or 35 cents a share, a year earlier.
Adjusted earnings from continuing operations totaled 29 cents a share, matching Thomson First Call's average analyst estimate. Earnings on this basis exclude a litigation gain and charges related to the Western Union spinoff, restructuring and mark-to-market accounting for derivatives.
The Denver-based company said revenue increased 9% to $1.8 billion from $1.65 billion a year earlier. Wall Street anticipated revenue of $1.79 billion. The company said the top line growth was driven by a better-than-expected performance in its commercial services division, where revenue rose 10% to $1.1 billion.
For the fourth quarter, First Data projects double-digit revenue growth and earnings from continuing operations of 33 cents to 35 cents a share. Analysts, on average, target earnings of 34 cents a share.
First Data also said it plans to repurchase $700 million of its shares by the end of 2007 under an existing buyback plan. The company's shares were down 3 cents to $22.92 in after-hours trading.
Western Union Profit Climbs
Western Union, which First Data spun off in September, reported third-quarter earnings of $258.1 million, or 34 cents a share, on revenue of $1.14 billion. Analysts, on average, expected earnings of 28 cents a share and revenue of $1.13 billion.
A year earlier, Western Union earned $241.9 million, or 32 cents a share, on revenue of $1.02 billion.
"During the quarter we saw strong, consistent growth in our international markets, which represent 60% of total Western Union revenue," said President and CEO Christina Gold. "This strong international performance offset softness in our domestic and Mexico businesses."
Western Union said total consumer-to-consumer transaction growth during the first three weeks of October is consistent with growth in the third quarter. The Englewood, Colo., company said it plans to meet its previous guidance for revenue growth of 11% to 12%.
Shares of Western Union recently were up 47 cents, or 2.4%, to $20.05 in late trading.