Giant 2007 Takeover Leaves First Data In The Red
ATLANTA – First Data Corp. yesterday reported a $171.2 million loss for the its fiscal second quarter, as huge debt taken on to finance the payments processor’s 2007 takeover by private equity giant Kohlberg Kravis Roberts & Co. continued to take a heavy toll.
Revenues for the second quarter rose by 18% to $2.6 billion, but the company continued to pay heavy interest on debt taken on to finance the $27 billion takeover, $450.9 million for the second quarter, and $899.8 million for the first six months of the year. The story was the same last year, as revenues rose 6% but debt service erased any net income and created a $1.1 billion loss for the year.
For the second quarter, the company’s retail and alliance services segment grew revenue 13% to $854 million, mainly because of a 9% growth in transactions.
Revenues for the financial services segment declined 7% to $351 million, which included a loss of Washington Mutual accounted for $40 million, and a $29 million decline associated with contract termination fees.
Revenues for the international segment rose 3% to $387 million for the quarter.
"We continued to grow our top line this quarter by winning new business and renewing contracts while also benefitting from the modest economic recovery," said Joe Forehand, chairman and CEO of First Data.