IMGCAP(1)]
The large data breach Heartland Payment Systems Inc. reported in January continues to adversely affect the payment processor, which reported a $13.6 million third-quarter loss; the company reported $13.4 million in net income for the same quarter a year ago. A $35.6 million charge to cover costs related to the breach (CardLine, 1/20) contributed to the quarter's loss, according to Heartland's third-quarter earnings report. Princeton, N.J.-based Heartland generated revenue of $442.6 million during the quarter, up 4.2% from $424.8 million a year ago. Heartland reported some improvement in same-store sales during the quarter compared with the second quarter. Robert Baldwin Jr., Heartland president and chief financial officer, told analysts during a conference call today that transaction-processing volume at Heartland's small and midsize merchants dropped 8.6% from a year ago but was about 110 basis points "better than the second quarter" of 2009. A basis point is one-hundredth of a percentage point. Heartland did not disclose actual transaction data. Retail, hotel and electronics-merchant categories were "worse than average, continuing recent trends, and petroleum remains weak given lower prices," Baldwin said, noting restaurants, auto parts and entertainment-classified merchants generated some growth. Mirroring recent reports of increasing debit card use (CardLine, 10/28), Heartland's debit card transaction volume grew by 9% compared with the second quarter, Baldwin said. "While transactions are up, the value of each transaction is down," he said. "This is due not only to smaller ticket sizes but also to the continued growth in debit share of our volume." Visa Inc. and MasterCard Worldwide debit transactions during the quarter grew by 8.3% from a year ago, Baldwin said, "while credit volume contracted by 8.3%."
