First Data Corp. swung into the red in the third quarter as transaction growth in its merchant business and an increase in card issuing were offset by changing consumer spending habits.
The Denver unit of Kohlberg Kravis Roberts & Co. said Friday that its revenue rose 4% from a year earlier, to $2.2 billion. For the quarter, it posted a net loss of $164.4 million, compared with a profit of $28 million a year earlier.
"Despite a difficult economic climate, we were able to grow revenue," Michael Capellas, First Data's chairman and chief executive, said in a press release. "Some significant wins" it will announce soon, "especially in the mobile commerce space," indicate sales momentum for newer products.
First Data said its international revenue rose 19%, to $487 million, boosted by a 21% transaction volume increase stemming from acquisitions made in earlier quarters.
Its merchant services business benefited from 9% transaction growth, but this gain was offset as consumers moved more spending to larger retailers. Revenue in the unit grew 6%, to $1 billion.
In financial services, First Data reported some growth in card issuing, but this was offset by lower check volume and lost business in its TeleCheck business. Total financial services revenue dropped 5%, to $700 million.