Huge Buyout Costs Cause Continued Big Losses At First Data
ATLANTA – Payments processing giant First Data Corp. reported this morning that debt service incurred in its 2007 takeover by private equity giant Kohlberg Kravis Roberts & Co., continues to keep it mired in the red, with second quarter losses increasing another 3% to $175.8 million.
The losses persist even as the company continues to report growing revenues, an increase of 5%, to $2.75 billion for the second quarter.
But interest expense related to the $27 billion buyout–one of the biggest in U.S. corporate history--rose again in the second quarter by 3% to $175.8 million, and by 1% to $904.6 million for the first six months of the fiscal year.
As a result, First Data reported a loss of $392.9 million for the first six months, even while revenues rose a strong 6% to $5.3 billion.
All of the company’s revenue growth was in its international segment, which reported a $64 million, or 17%, increase in second quarter revenue to $451 million. Both the company’s core retail and alliance services segment and financial services segment, reported declines in revenue of 1% and 2%, respectively.