Fiserv Inc. (FISV) reported revenues of $1.06 billion in the fourth quarter of 2009, up 1.9% from a year ago.
Fiserv assists financial institutions and health plan administrators in managing their information systems so that they can efficiently deliver services to their customers.
The company operates in two business segments – Financial Institution Services, and Payments and Industry Products. Financial Services generated $497 million of revenues in the quarter, up 1.4% from a year ago. Payments and Industry Products generated $513 million of revenues, up 2.4% from a year ago. Fiserv continued to expand its payment footprint by signing 113 electronic bill payment clients in the quarter and 407 clients in 2009.
Operating margin came in at 28.1%, down 20 basis points year over year. Management decided to double the amount of discretionary profit sharing for all eligible associates in 2009, which resulted in approximately $10 million of incremental expense in the quarter, thereby adversely impacting the operating margin by 100 basis points. Earnings per share (EPS) came in at 94 cents for the quarter compared to 89 cents in the year-ago quarter, and in line with the Zacks Consensus Estimate.
Fiserv completed the previously announced divestitures of its Loan Fulfillment Solutions business and the final portion of its trust business known as Fiserv ISS business in the fourth quarter of 2009.
Fiserv repurchased 1.1 million shares of its common stock in the quarter and 4.1 million shares in 2009. As of December 31, 2009, the company had approximately 2.2 million shares remaining in its authorization program. The company also repaid $140 million of debt in the quarter and $475 million in 2009. Fiserv ended the quarter and year 2009 with cash and equivalents of $360 million, up from $230 million at the end of 2008.
For 2009, the company reported revenues of $4.08 billion, down 11.1% from a year ago. Financial Institution services generated revenues of $1.94 billion, down 3% year over year. 2009 was a challenging year for the company, with the economic turmoil impacting the Financial Services segment the hardest. Payments and Industry Products generated revenues of $1.95 billion, up 1% over the prior year.
Operating margin increased 110 basis points year over year to 28.7%. EPS came in at $3.66 compared to $3.33 in 2008, in line with the Zacks Consensus Estimate.
Going forward, management expects internal revenue growth in the range of 1% –3% in 2010. Operating margin is estimated to increase at least 50 basis points over 28.7% achieved in 2009. Earnings per share are projected between $3.96 and $4.07, a growth of 8% to 11% compared to $3.66 in 2009.
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