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Softness in consumer spending and ongoing economic constraints resulted in a $289 million net loss for First Data Corp. during the third quarter, the company said Friday.
First Data posted a 13 percent revenue increase of $2.4 billion year over year. The net loss was attributed in part to a 40 percent increase in network fees and $448 million in interest expenses.
The losses were greater than the $164 million in losses incurred last year. For the first nine months of the year, losses grew to $716 million from $547 million in 2008.
First Data Chairman and CEO Michael Capellas said he expects the weak economy and constrained credit markets to put a damper on the company’s earnings through the midpoint of 2010.
“The economy doesn’t appear to be getting significantly worse,” he said Friday during a conference call with analysts and reporters.
Thursday, about 250 First Data workers around the world lost their jobs. It is believed that about 50 people lost their jobs in Omaha.
During the quarter ending Sept. 30, declines in credit card spending caused revenue in First Data’s retail segment to drop 4 percent to $797 million. Financial services segment revenue dropped 11 percent to $339 million. And international revenues fell 10 percent to $415 million.
“Despite a tough economy, we are taking advantage of unique opportunities in the marketplace,” Capellas said in the earnings release. “We are focused on our future as we continue to invest in new product development, reduce costs and expand our distribution channels.”
First Data is a major third-party processor of credit and debit card transactions for card-issuing banks and retailers. It also prints cards and bills cardholders.
Highlights for the quarter included an agreement with Barclays for global credit card issuing, and renewed contract agreements with 131 financial institutions, including General Electric.
The company, which went private in 2006, does not report per-share earnings.
Contact the writer:
444-1414, ross.boettcher@owh.com
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