Publicly held financial technology companies generally reported higher quarterly earnings over the past week, although a few firms attributed a squeeze in profits to a shrinking banking industry.
Alltel Corp. reported a 9.3% increase in earnings, although operating income from its information services division declined slightly.
The Little Rock-based telecommunications and computer services firm reported first-quarter net income of $78.6 million, or 41 cents per share - compared with 38 cents a share in the year-earlier period. Alltel's profits were in line with Wall Street analysts' expectations, according to information published by First Call Corp.
Officials noted that quarterly operating income from the company's Alltel Information Services unit declined by 6% from the year-earlier period, to $27.5 million. Revenues at the unit increased, however, rising 9% from the first quarter 1994, to $218 million.
The division, formerly known as Systematics Information Services Inc., provides outsourcing services and software to banks, health care providers, and telecommunications companies.
"As expected, information services results reflect the effect of continued consolidation in the financial industry, as well as the uneven flow of new contracts," said chairman and chief executive Joe Ford. "The booking of new software sales was particularly light during the first quarter, which affected margins."
Another big bank systems outsourcing firm, Fiserv Inc., fared better in the quarter. The Milwaukee-based company reported that its first-quarter earnings totaled $10.4 million, a 20% increase from the year-earlier period. Earnings per share were 26 cents, an increase of 4 cents. Revenues increased 12%, to $152.6 million.
Affiliated Computer Services Inc., a data processing and electronic funds transfer services company based in Dallas, reported a 40% increase in net income for its third fiscal quarter ended March 31, to $4.5 million. Earnings per share were 34 cents, 6 cents higher than in the year-earlier period.
"Our strategic acquisitions and new sales activities continue to fuel growth," said chairman and CEO Darwin Deason.
Transaction Systems Architects, a developer of funds transfer software used by many banks, reported higher revenues for its second fiscal quarter of 1995.
The Omaha-based firm, which successfully floated 2.4 million shares of common stock last February, said revenues for the period rose 17.6% from the year-earlier quarter, $26.8 million. But due to acquisition costs and a $2.8 million extraordinary charge related to the early retirement of debt, the firm reported a net loss of $458,000 for the quarter. Without these charges, Transaction Systems earned $2.5 million or 20 cents per share, officials said.
"The company's financial position continues to strengthen," said president and CEO William Fisher. "Our cash balance at the end of March 1995 was $13.6 million and our backlog and recurring revenues continue to grow."
Another banking software firm, CFI Proservices Inc., reported its first- quarter revenues grew slightly, although its earnings fell.
The Portland, Ore.-based firm's net profit for the period was $220,000, or 5 cents per share, down from $736,000, or 15 cents per share, for the first three months of 1994. Revenues for the period totaled $7.3 million, compared with $7.2 million for the first quarter last year.
"CFI is repositioning itself to respond to the consolidation of the financial services industry," said chairman and CEO Matt Chapman. "We choose to grow, and that growth must come, in large part, from sales to larger institutions.
