Though many banks began to increase their card-marketing initiatives earlier this year, consumer response rates have been low, and that is likely to continue, Mark Greene, CEO of FICO, an analytics and decision management technology company, told analysts during a conference call to discuss third-quarter earnings.
“We anticipate the pace will remain sluggish until we see improvement in the U.S. economy, especially in unemployment,” he said. Greene did not say what the response rate has been to card solicitations, but a spokesperson explained to PaymentsSource later that FICO has not seen an up tick in credit prescreening activity, which would indicate issuers’ success with their marketing.
Moody’s Investor’s Service estimates call for the unemployment rate to plateau during the remainder of the year at 10.1%.
Issuers began to increase their card-solicitation mailings during this year’s first quarter, as volume shot up by 83% from a year earlier (
Greene said he was cautious about growth opportunities in the United States for the company, which provides credit-scoring services, “as high unemployment and depressed consumer sentiment dampen the outlook for consumer lending and thus the near-term growth prospects for scores.”
Minneapolis-based FICO reported net income for the quarter of $17.9 million, down 1.1% from $18.1 million during the same period last year.
During the quarter, the company formerly known as Fair Isaac & Co. reported revenues for the quarter ended June 30 of $155.3 million, down 0.4% from $156 million during the same period last year. Revenue for the first three quarters of the fiscal year totaled $450.6 million, down 5.9% from $478.8 million during the same period last year (see chart).
During the quarter, FICO derived 78% of total revenue from North and South America, 16% from the Europe/Middle East/Asia region and 6% from the Asia/Pacific region, all consistent with the previous quarter, Tom Bradley, FICO chief financial officer, told analysts during the call.
Recurring revenue derived from transactional and maintenance sources for the quarter represented 75% of the total revenue versus 79% in the previous quarter, he said.
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