Metavante Technologies Inc. said Thursday that cost-cutting in its image-processing business helped it drive profit growth in the fourth quarter.
The Milwaukee technology vendor, which has a large outsourcing business, also said it believes that tumult in the financial markets might help it win business with larger customers.
Michael D. Hayford, Metavante's president and chief operating officer, said the company defines middle-market banking, its traditional target market for outsourcing work, as institutions with more than $3 billion of assets, though the category's upper limit has been shifting.
"We used to say $50 billion, but we think institutions above that might be interested in looking at outsourcing," Mr. Hayford said on a conference call with analysts to discuss financial results as Metavante completed its first year as an independent company.
It joined competitors Fiserv Inc. and Jack Henry & Associates Inc., which mainly serve small and midsize banks and credit unions, in reporting strong results this week.
Metavante reported fourth-quarter net income of $40.4 million, compared with a loss of $92.8 million the year earlier.
It took an impairment charge of $129.4 million in the fourth quarter of 2007 after its spinoff from the Milwaukee banking company Marshall & Ilsley Corp. that November.
Revenue rose 6%, to $433.4 million.
Earnings of 40 cents per share topped Wall Street's average estimate by 3 cents.
Operating income grew 22% in Metavante's payments unit — which accounts for 61% of its business — to $82.7 million. The company credited cost cuts in its image business in the fourth quarter of 2007 and "operating leverage" in other units.
Revenue in that segment grew 8%, to $264.5 million,
Operating income in its financial solutions unit, which includes core processing, was flat, at $38.7 million. The company said it was investing in "discretionary spending" on product development. Revenue there grew 4%, to $168.9 million
Metavante said it expects organic revenue growth this year of 3% to 4% and growth of 12% to 16% in diluted earnings per share.
