Headlines:
Jack Henry Posts 19% Earnings Increase Purchase Boosts Online Resources Profits Harrisdirect Expands Transfer Capabilities
Jack Henry Posts 19% Earnings Increase
Jack Henry & Associates Inc.'s profits for its fiscal third quarter, which ended March 31, grew 19% from a year earlier but fell short of analysts' expectations.
On Wednesday the Monett, Mo., core processing outsourcer reported net income of $19.4 million, or 21 cents a share. Revenue grew 12%, to $134.4 million. Wall Street had been expecting earnings of 22 cents a share on revenue of $140.5 million.
Jack F. Prim, the chief executive of Jack Henry, said in a press release, "The acquisitions that we have completed during the fiscal year continue to show significant promise, but as we have mentioned in earlier communications, several of these will take additional time to increase their revenues to generate margins equal to our traditional expectations."
Last year Jack Henry made eight acquisitions, some related to its main business of providing core processing software and outsourcing, and others in new areas, such as fingerprint recognition and automated teller machine management.
Purchase Boosts Online Resources Profits
The Chantilly, Va., Internet banking outsourcing provider Online Resources Corp. said its first-quarter earnings rose sixfold from a year earlier, to $2.4 million, in part because of the acquisition of Incurrent Solutions Inc.
Revenue grew 55%, to $15.1 million. Earnings per share of 11 cents topped analysts' expectations by 2 cents.
Online Resources said Wednesday that it decided to delay the expensing of stock-based compensation, which would have cost it 2 cents a share in the first quarter. The Securities and Exchange Commission has ruled that companies must begin expensing such compensation, but it has delayed the implementation of that rule. Online Resources said it would not record the expense until next year.
Its card revenue included $1 million from the former Sears, Roebuck and Co. card portfolio, which uses Incurrent to process transactions. Sears sold its card operations to Citigroup Inc. in 2003, and the New York banking company is expected to stop using the Incurrent system this quarter.
Online Resources acquired Incurrent, a Parsippany, N.J., provider of outsourcing services for credit card issuers, in December for $8 million in cash and $7.3 million in stock.
On Wednesday, Online Resources said it expects to earn $1.4 million to $1.6 million, or 5 to 6 cents a share, this quarter on revenue of $13.5 million to $13.9 million. For the full year it expects to earn $9.2 million to $9.9 million, or 36 to 39 cents a share, on revenue of $56.5 million to $58 million.
Harrisdirect Expands Transfer Capabilities
Harrisdirect LLC, a Jersey City online brokerage unit of Bank of Montreal, is now letting customers transfer money both into and out of their accounts online.
Previously, Harrisdirect allowed only inbound online transfers. To move money out of a Harrisdirect account, a customer needed to send a request by telephone or fax.
"We want to keep our clients online," Maryann Wasik, the managing director of product strategy for Harrisdirect, said in an interview. "That's where they want to interact with us - that's the reason they come to an online firm."
To force them offline for any transaction makes for "a broken experience," she said.
Harrisdirect started using transfer software from CashEdge Inc. on Jan. 21, but the New York banking technology vendor is expected to announce the deal Monday.
Ms. Wasik said the software uses the automated clearing house network to move money. Harrisdirect's previous system required the conversion of inbound transfers into paper checks.
Sanjeev Dheer, CashEdge's president and chief executive, said Harrisdirect is one of two brokerages that have purchased the software in recent months. (He would not name the other.)
"Unlike banks, brokerages don't have some kind of physical infrastructure," he said. "This is almost like a lifeline" for brokerages, especially online ones.
Brokerages are "great believers in electronic funds transfer," and many were early adopters of the technology, though none had approached CashEdge until about 18 months ago, Mr. Dheer said. "What we're seeing now is almost a second wave" of adopters.
Ms. Wasik said Harrisdirect is also considering using CashEdge's product for aggregating outside account balances.
