First Data Posts Flat Profit

Revenue growth is led by Western Union.
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First Data

(FDC) - Get Report

posted roughly flat first-quarter earnings as Western Union, the money-transfer unit that's set to be spun off, led revenue growth.

The Denver-based payment processor's profit declined slightly to $373.7 million, or 48 cents a share, from $374.7 million, or 47 cents a share, a year earlier. The latest quarter's results included 1 cent a share in items, primarily related to a $15 million patent-lawsuit settlement. According to Thomson First Call, analysts had a mean estimate for earnings of 49 cents a share.

First Data's revenue rose 10% to $2.70 billion from $2.47 billion last year, roughly in line with Wall Street's forecast of $2.68 billion. Western Union's revenue grew 16% to $1.1 billion. First Data announced in January that it is planning to spin off the storied telegram outfit as part of a plan to reinvigorate its growth.

First Data's second-largest division by revenue, commercial services, posted 9% revenue growth to $935 million.

"We are excited about our performance in the first quarter, especially that of Commercial Services, said CEO and Chairman Ric Duques in a statement. "Results were in line with our expectations and we are pleased with the underlying strength in all of our major segments."

First Data reiterated its forecast for 2006 earnings from continuing operations of $2.35 to $2.42 a share. Analysts, on average, see earnings of $2.39 a share. The company predicted second-quarter earnings of 52 cents to 55 cents a share, which is shy of analysts' projection of 58 cents. The forecasts exclude any costs related to the spinoff.