Slow consumer spending helped drive up First Data Corp.'s loss in the first quarter.
The Denver processor said Friday that its loss grew 4% from a year earlier, to $231.3 million, while revenue fell 2%, to $2.1 billion.
"Our outlook remains cautious overall," Michael Capellas, First Data's chairman and chief executive officer, told analysts Friday during a conference call to discuss the results.
There are some signs that same-store sales — a measure of transactions at merchants that have been in business for at least a year — is stabilizing, Capellas said. "What we're seeing is a stabilization of same-store transaction growth at between 5% and 6%. It's still too early to see if this will remain for the balance of the year."
First Data, a unit of Kohlberg Kravis Roberts & Co., said revenue in its retail and alliance services unit, which includes its merchant processing and acquiring services, increased 9%, to $1.2 billion. It signed up 117,000 new merchant locations during the quarter.
Revenue from the financial services unit, which offers products and services to banks, decreased 2.6%, to $544.2 million. It reported 130 contract renewals during the quarter.
Revenue from the international unit fell 16%, to $368.7 million. Transaction volume increased 10%.
First Data cited poor economic conditions as the primary reason for the lackluster results.
In a filing with the Securities and Exchange Commission, the processor cited "a dramatic acceleration" in the economic decline in the fourth quarter, along with "broad slowdowns in consumer spending" in the first quarter.
First Data also said consumer spending at large discount merchants declined slightly in the first quarter, after increasing sharply during the fourth-quarter's holiday season.
Such merchants often strike processing deals that offer them better processing rates and cut into the processors' margins.
Decisions by many card issuers to reduce credit limits, close accounts and tighten issuing standards also affected First Data's financial services business, the company said.