Fiserv Announces Revenue Growth amid First Data Deal

As Fiserv heads to its acquisition of First Data for $22 billion, a massive payment and the agreement with FinTech that is now expected to close on July 29 or around that date, it placed second-quarter finances on Thursday (July 25) showing continuous growth in some crucial areas. The report follows the publication of First Data earnings earlier in the day.

For its second-quarter earnings report, Fiserv said total second-quarter revenue reached $ 1.51 billion, an annual increase of 6 percent, and a figure that supposedly met analyst expectations. The company also said that in the second quarter of 2019, it records an annual revenue gain of 10 percent in its Payment operations, along with a revenue gain of 2 percent in its financial segment. During the first six months of 2019, GAAP revenues increased 5 percent to $ 3.01 billion compared to the prior-year period, with a 9 percent growth in the Payment segment. Also, the income of the financial segment relatively consistent with the period of the previous year.

Investors in operations outside working hours also seemed pleased with the expectations of Fiserv analysts for their 56 cents of net profit per share reported for the second quarter of 2019, and 80 cents of net profit per share when earnings are recorded and One-time costs. Analyst expectations for that were 82 cents per share.

"We got stronger results than expected in the second quarter in all financial measures, including double-digit sales growth," said Jeffery Yabuki, president and CEO of Fiserv. "At the same time, we continue to move forward in our integration planning efforts for our pending First Data acquisition, which we expect to close on July 29."

For the rest of the year, Fiserv said it expects growth in internal revenues up to 5% for the year. The adjusted earnings per share are expected to grow 10 to 14 percent.

Earlier on Thursday, First Data reported its second-quarter results and, in general, also provided good news to Wall Street.

First Data said that for the second quarter, the firm reported an adjusted EPS of $ 0.42 per share, surpassing the consensus. Total segment revenues in the second quarter increased 2 percent and 7 percent in constant organic currency. Second-quarter income was $ 2.5 billion, higher than the $ 2.27 billion that Wall Street was looking for and 2 percent year-over-year.

When observing the rest of the year, First Data supported its previous forecast for EPS from $ 1.55 to $ 1.58 per share, and total segment revenues increased from 5% to 6% and total segment EBITDA increased from 6% to 8% on a constant currency basis. The company expects to end 2019 with $ 1.5 billion in free cash flow.

Earlier this year, Fiserv signed an agreement to acquire First Data for $ 22 billion in a stock transaction. At the time the deal was announced, the companies said users would benefit from a "highly complementary combination" that offers a range of payments and financial services, covering account processing and digital banking, integrated payments and Clover POS system, among other products and services.

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