First Data reports flat Q1

Consolidated revenue was $2.7 billion, up 10%. Net income from continuing operations was $375 million, or $0.48 per share. Earnings per share were negatively impacted by a net $0.01 of other items, primarily related to the $15 million settlement of a previously filed patent lawsuit.

"We are excited about our performance in the first quarter, especially that of Commercial Services. Results were in line with our expectations and we are pleased with the underlying strength in all of our major segments. Segment revenue growth was 10%, with strong segment operating profit growth of 13%," said Ric Duques, chairman and chief executive officer. "We are well positioned to deliver on our committed earnings growth projections. We continue to focus on driving sales and delivering quality service to our clients. We will continue to take positive actions in areas that do not meet our expectations; thereby unlocking the inherent shareholder value within First Data."

Segment Results

For the quarter, Western Union generated revenue of $1.1 billion, a 16% increase, and operating profit was $337 million, up 13%. Profit margin was strong at 32%. Western Union's results were driven by strong consumer-to-consumer transaction growth of 31%. Consumer-to-consumer revenue increased 18%. The consumer-to-business service continues its turnaround and delivered transaction growth of 12% and revenue growth of 5%.

For the quarter, Commercial Services generated revenue of $934 million, a very strong 9% growth or 6% excluding reimbursable debit network fees. Operating profit was $214 million, up a strong 24% or 9% excluding integration expense from 2005. Margin for the quarter improved to 23% from 20% or to 28.4% from 27.6% excluding reimbursable debit network fees and 2005 integration costs. First quarter results were driven by a continued focus on sales, operating cost efficiencies and strong transaction growth of 15%.

For the quarter, Financial Institution Services generated revenue of $445 million, down 5%. Operating profit was $84 million, down 4%. Margin for the quarter improved to 18.9% from 18.6% or to 28.8% from 27.6% excluding reimbursables.

For the quarter, First Data International generated revenue of $264 million, up 24% and operating profit was $29 million, up 35%. Margin improved to 11.0% from 10.1%.

Outlook for 2006

Commenting on the rest of the year Duques said, "We are confident in delivering on our 2006 earnings per share target of $2.35 - $2.42 from continuing operations. While it has not been our practice to provide quarterly guidance, given the transitional nature of this year, we feel it is important to share our earnings per share expectations for the second quarter. We anticipate second quarter earnings per share to be in the range of $0.52 to $0.55 from continuing operations, which is squarely in line with our original second quarter 2006 operating plan. Both full year and second quarter guidance exclude future spin costs and any impact from the spin or sales of businesses, as we are currently unable to reasonably estimate these items."