Increased automated teller machine transaction volume in the first quarter was offset by slowing demand for bank branding deals, Cardtronics Inc. said Thursday, resulting in lower revenue and a wider loss.
The Houston ATM operator reported a net loss of $5 million, up 9.3% from the year earlier. Revenue fell 5.2%, to $115.3 million, but total ATM transactions grew 7%, to 89.3 million.
Rick Updyke, Cardtronics' president of global development, said the poor economy is increasing the demand for cash. "Cash continues to hold its own. Most consumers favor cash over credit," Updyke said during a conference call with analysts.
Christopher Brewster, Cardtronics' chief financial officer, said that U.S. banks have cut the branding agreements in which they pay Cardtronics a fee to place their name and logo on ATMs that Cardtronics operates, usually at retail sites.
The company deactivated 300 money-losing ATMs during the quarter as part of an effort to control costs.
Cardtronics also believes that the burgeoning swine flu outbreak will probably drive down transaction volume on its machines in Mexico, according to Mike Clinard, the president of its global services unit.
Mexico has been named as the epicenter of the outbreak, and "we expect to experience a slowdown in transactions, especially in the tourist areas," he said. Of the company's more than 33,000 ATMs, 2,094 are in Mexico.
Fred R. Lummis, Cardtronics' chairman and interim chief executive, said the company has hired a search firm to help it find a permanent successor to former CEO Jack Antonini, who left the company in March.
When an analyst asked why Antonini had stepped down, Lummis replied, "Jack led the company for six years through profitable growth, but the company is much different today."