Fiserv, Inc. (FISV) announced that its Board has authorized it to repurchase up to five million additional shares of its common stock — approximately 3% percent of its outstanding shares.
As of March 1, 2010, the company had approximately one million shares remaining in its previous repurchase authorization. Fiserv repurchased 1.1 million shares of its common stock in the last quarter and 4.1 million shares in 2009.
Under the new authorization, Fiserv may repurchase shares in the open market or from privately negotiated transactions at the discretion of management, subject to its assessment of market conditions and other factors. The company currently prefers to use its operating cash flow to repay debt and fund capital expenditures, acquisitions and share repurchases, rather than pay dividends.
In 2009, capital expenditures stood at $198 million. Despite management focusing on repaying debt, the balance sheet of the company is highly leveraged. Fiserv had only $363 million of cash and equivalents and a total debt of $3.6 billion at year-end 2009, compared to $4.1 billion at the end of 2008.
In-Line Fourth Quarter
Last month, Fiserv reported results for the fourth quarter and full year 2009, which were in line with expectations. Revenues of $1.06 billion in the fourth quarter of 2009 were up 1.9% from a year ago. Earnings per share (EPS) came in at 94 cents for the quarter compared to 89 cents in the year-ago quarter, and were in line with the Zacks Consensus Estimate.
For 2009, the company reported revenues of $4.08 billion, down 11.1% from a year ago. EPS came in at $3.66 compared to $3.33 in 2008, in line with the Zacks Consensus Estimate.
Guidance for 2010
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.
EPS is projected between $3.96 and $4.07, a growth of 8% to 11% compared to $3.66 in 2009. The current Zacks Consensus Estimate is $4.01, with a downward potential of 0.25%.
Fiserv assists financial institutions and health plan administrators in managing their information systems so that they can efficiently deliver services to their customers.
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