Headlines:
Carreker Reports a Loss, Cites Delays
Carreker Corp. reported a loss for its fiscal third quarter, which ended Oct. 31, because Hurricane Katrina delayed some projects, which drove down revenue.
On Wednesday the Dallas check-processing and imaging software vendor reported a loss of $950,000, or 4 cents a share, compared with a profit of $513,000, or 2 cents a share, for the same period last year. Revenue declined 7%, to $28.4 million.
Carreker said customers postponed some consulting jobs and software installations because of the hurricane, but the vendor did not quantify the effect of those delays on its results.
The loss included a charge of $780,000, or 3 cents a share, to cover a reduction in head count. Carreker, which is restructuring its payments business, said the job cuts should annual lower labor costs by $2.4 million.
Fiscal third-quarter software licensing revenue was higher than the total in either of the first two quarters of the year. Carreker did not offer specific predictions for this quarter's software revenue and profits, except to say it expects the figures to be the best of the year.
Carreker has suffered financially in the past few years because banks have been slow to invest in imaging technology. Many banks are starting to settle checks through image exchange networks, but the shift is happening more slowly than Carreker and other technology vendors had expected.
John D. "Denny" Carreker, the company's chairman and chief executive, called the results "mixed" but said the cost-reduction efforts and upcoming products would help drive up revenue and profits.
"We're trying to do everything we can to create new products to counteract some of the downdraft we have on some of our older products," Mr. Carreker said on a conference call with analysts Wednesday. "We're incredibly dedicated to this."
George F. Sutton, an analyst at Craig-Hallum Capital Group LLC of Minneapolis, who has a "buy" rating on Carreker's stock, said the results were disappointing.
"Although the company continues to find incremental costs to remove, revenue growth remains difficult despite a splurge of new products," said Mr. Sutton, the only analyst who publishes estimates on Carreker's earnings. He lowered his full-year earnings estimate by a penny, to 4 cents a share, and his revenue estimate by 6.3%, to $31.1 million.
Carreker's struggles have attracted the attention of an activist shareholder. Prescott Group Capital Management LLC of Tulsa, which owns 7.5% of Carreker's shares, made a formal demand Nov. 29 for access to the vendor's books, to evaluate whether it should be sold, according to a filing with the Securities and Exchange Commission.
Phil Frohlich, the principal of Prescott Group, would not elaborate Thursday on his company's plans.
Mr. Sutton said he expected the investor's pressure to either drive up the stock price or prompt a sale.
NYCE Canadian Volume Hits 1 Million
The NYCE debit network, a subsidiary of Marshall & Ilsley Corp. of Milwaukee, said it has logged its millionth transaction from Canadian debit cardholders traveling in the United States.
NYCE, which began accepting Canadians' debit cards in the United States in October 2004, said Tuesday that Canadian cardholders have made more than $56.7 million of U.S. debit purchases since then. NYCE is operated by M&I's technology subsidiary Metavante Corp.
Nearly half of Canadians' PIN debit transactions were made at supermarkets, NYCE said; other top retailer sites included gas stations, discount retailers, clothing stores, and drugstores. PIN debit is ubiquitous in Canada, but signature debit is rarely used there.
Canadian shoppers used their debit cards in Florida more often than in any other state, the network said; New York, Washington, California, and Michigan rounded out the list of top five states. NYCE said it had recorded cross-border debit transactions in all 50 states, the District of Columbia, Puerto Rico, and at U.S. military bases in Europe and Asia.
NYCE also said Canadian cardholders have consistently made larger debit purchases than Americans; in the 12 months that ended in October, the average American debit transaction was $46, while the average Canadian transaction was $62.
