First Data Corp. last week reported a slightly bigger-than-expected fourth-quarter loss, mainly due to one-time restructuring charges after its blockbuster merger with First Financial Corp.
Officials at Hackensack, N.J.-based financial system outsourcer said the company had a net quarterly loss of $389.7 million, or minus $1.75 per share. Fourth-quarter results were affected by a $645.7 million pretax charge related to merger and integration costs associated with First Financial deal.
Without the charge, fourth-quarter net income would have been $150.2 million, or 65 cents per sharean increase of 27%, or 10 cents a share, over the year-earlier period.
Analysts were expecting First Data to earn 68 cents per share in the latest quarter before the merger costs, according to First Call Corp.
Officials said operating revenues increased 27% to $1.1 billion, up from $880 million in 1994's corresponding quarter.
"1995 was a landmark year in the strategic positioning of First Data for the years ahead," said chairman and chief executive Ric Duques. "We are very pleased with the initial results of our new, combined entity. Our integration efforts are on track, our core markets are growing nicely, and we are positioned for solid progress in 1996."
First Data officials noted that the fourth quarter pretax charge included $221.7 million in direct costs of the merger, primarily to nondeductible severance payments to several First Financial executives. Additional integration costs are expected to be incurred during the first quarter of 1996.
First Data also said it is pursuing the Federal Trade Commission requirement that it divest itself of its MoneyGram operation, either through a private sale or an initial public offering. The Company expects to report a "significant gain" on the sale, officials said.
Another giant in the financial system outsourcing business, Electronic Data Systems Corp., said a strong fourth quarter helped it exceed $12 billion in revenues for the first time in its history.
Fourth-quarter 1995 net income rose nearly 14%, to $269.5 million from the same period in 1994. Earnings per share increased 14.3%, to 56 cents, from the year-earlier period. Analysts had predicted EDS to earn 57 cents per share in the fourth quarter, according to First Call.
EDS registered operating revenues of $3.62 billion for the latest quarter, an increase of 24.4% over the year-earlier quarter. It signed more than $3.4 billion in new contracts in the fourth quarter.
Part of the new business from the financial service industry included a 10-year, $75 million technology outsourcing agreement with Credito Emiliano, a private bank in Italy with 180 branches and 2,000 employees, EDS' first such contract with an Italian bank.