Headlines:
Fiserv: No More Quarterly Guidance Ex-First Data CEO Makes $51M on Options Shareholder Suit vs. Hypercom Dismissed
Fiserv: No More Quarterly Guidance
Fiserv Inc., its fourth-quarter revenue swelled by a contract termination that will bite this year, will no longer issue quarter-by-quarter earnings guidance, its new president and chief executive said Tuesday
Instead, Jeffery W. Yabuki said, each quarter the technology vendor will update its estimates of full-year figures.
The pressure to meet quarterly estimates could distort decision making, said Mr. Yabuki, who took the reins in November. He said he wants "decisions that are good for the long term 100% of the time."
He spoke during a conference call with analysts.
The Brookfield, Wis., company reported a fourth-quarter profit of $150.5 million, up 54% from a year earlier. The per-share figure was 81 cents. Meeting analysts' expectations, Fiserv said adjusted earnings from continuing operations totaled 56 cents per share.
Revenue rose 14%, to $987.7 million, though that included a $26.3 million contract-termination fee from one customer. "I'd rather have no termination fees, because of the impact it has on our future earnings," Mr. Yabuki said.
Last year the company reported the termination of three contracts that collectively brought in about $40 million a year of revenue. It did not identify the customers.
Full-year profit grew 37%, to $516.4 million, or $2.70 a share. Revenue increased 11% to $3.71 billion.
Fiserv projected 2006 earnings of $2.46 to $2.53 per share. It estimated that revenue from current operations would grow at a mid-single-digit percentage rate in its financial and investment segments and a low-double-digit rate in the health segment.
This year, Mr. Yabuki said, Fiserv will concentrate on developing its payments operations in areas where it has not focused in the past. These include online bill payment (building on the August acquisition of BillMatrix Corp. of Dallas) and card processing, including credit, debit, and stored-value cards.
New areas of focus will also include consumer-directed health care, Mr. Yabuki said. In January the company bought CareGain Inc. of East Windsor, N.J., which offers integrated technology for administering various kinds of health-finance accounts.
One thing will remain the same as under his predecessor, Leslie M. Muma; Acquisitions are likely, Mr. Yabuki said. "Our appetite remains - what would you say? - robust, strong. We want to eat a lot." Fiserv, founded in 1984, has bought more than 135 companies.
Ex-First Data CEO Makes $51M on Options
Charles T. Fote, the former chairman and chief executive of First Data Corp., made almost $51 million Friday by exercising his stock options and then selling the shares.
According to a filing with the Securities and Exchange Commission, Mr. Fote exercised options for 2,369,584 shares of the Denver processor's stock on Jan. 27 at prices ranging from $12.33 to $35 a share and then sold it all for $44.75 a share. He still owns 335,684 shares that he held before exercising his options.
Mr. Fote sold the stock the day after First Data announced it would spin off Western Union Financial Services Inc., its money-transfer unit. The news drove up the share price by 5.35% that day and eclipsed a 15% drop in fourth-quarter net income, which was also announced Thursday.
Mr. Fote resigned as First Data's CEO on Nov. 28 and as chairman at yearend. He was succeeded by his predecessor, Henry C. "Ric" Duques. Mr. Fote remains a First Data director and a consultant to the company.
Shareholder Suit vs. Hypercom Dismissed
A shareholder lawsuit against the point of sale terminal company Hypercom Corp. and two former executives has been dismissed, the Phoenix company said.
Last year six shareholder suits were filed in response to Hypercom's restatement in February of financials for the first three quarters of 2004. It said it had misclassified some terminal leases by a Hypercom subsidiary in the United Kingdom.
The suits were consolidated into one in May.
Judge Neil Wake of the U.S. District Court for the District of Arizona ruled Jan. 24 that the plaintiffs had failed to show that Hypercom, former chairman and chief executive Christopher S. Alexander, and former chief financial officer John W. Smolak had knowingly acted illegally.
Hypercom announced the decision last week. Mr. Smolak left the company last March; Mr. Alexander retired shortly afterward.
