Many publicly traded financial technology companies reported higher quarterly earnings last week, with payment systems firms showing especially strong gains.
All of the bank systems and services firms reporting had higher revenues and profits for the period, and for the most part their earnings were in line with Wall Street expectations. Earlier this month, technology stocks overall took a dive when investors worried third-quarter earnings would be disappointing.
First Data Corp. reported a 21% increase in net income to $70 million, or 58 cents per share.
The Hackensack, N.J.-based credit card processing giant said third- quarter revenues were $510 million, up 18% from the year-earlier period.
"Our performance to date positions us well for our upcoming merger with First Financial Management Corp.," said Ric Duques, First Data's chairman and chief executive. "We anticipate the merger closing by the end of the month and eagerly await the combined strength of the newly merged companies."
First Financial also announced upbeat results last week. The Atlanta- based merchant processor reported third-quarter earnings of $52 million, or 79 cents a share, a 28% increase. Wall Street analysts were predicting earnings per share of 78 cents, according to First Call Corp.
Revenues were up 51%, to $818 million.
"We are pleased to enter our merger with First Data with a solid financial foundation, including strong underlying growth across our businesses, a strong balance sheet, and continued strong cash flow," said Patrick Thomas, chairman and chief executive of First Financial.
Another merchant payments processor, SPS Transaction Services Inc., reported a 19% increase, to $11.8 million.
Revenues grew 30%, to $80.7 million. The Riverwoods, Ill.-based company said point of sale transactions grew 13%, to 95.4 million.
"While we are mindful that our receivable balance is now more sensitive to holiday sales and their related impact on our fourth quarter, we are very encouraged about the future and our company's positioning for future growth," said Robert L. Wieseneck, SPS' president and chief executive.
Total System Services said its net income increased 29% to $7.4 million, or 11 cents per share.
Revenues were $66.1 million, an increase of 37.9%.
"This performance is a result of strong growth in revenues from both our U.S. and Mexican customers," said Richard W. Ussery, the credit card processor's chairman and CEO. "Both of these sources of earnings growth exceeded our projections, and we anticipate an excellent fourth quarter. We now expect growth in net income for 1995 to exceed 20%"
Affiliated Computer Services Inc., another big player in the electronic funds transfer services business, said earnings for its first quarter of fiscal 1996 were $5.7 million, up 50% from a year earlier.
Revenues were up more than 26%, to $89.3 million.
"Our new sales and strategic acquisitions activities continue to fuel growth," said chairman and CEO Darwin Deason. "I am very pleased that our commitment to providing creative, cost-effective information technology solutions has led to a solid first-quarter performance."
Jack Henry & Associates reported sharply higher earnings for its first quarter of fiscal 1996. The developer of community banking systems reported net income of $3.1 million, or 25 cents per share, an increase of $1.3 million, or 10 cents per share over the corresponding period a year earlier.
The hefty profit growth was a pleasant surprise for stock analysts, who had predicted the Monett, Mo.-based firm would earn only 20 cents per share, according to First Call.