First Data Corp (NYSE: FDC)
First Data Corp. on Monday announced third-quarter revenue that topped expectations, but earnings fell short. The adoption of a new revenue recognition standard saw revenue drop 22% from a year earlier to $2.36 billion.
Earnings attributable to the company shot up more than 30% year over year, thanks to improved operating performance and divestiture gains. However, the company slashed its 2018 expectations for adjusted per-share-earnings and segment revenue growth.
The trimmed guidance prompted a selloff of its shares by investors in early trading. Shares of the company, which have rallied 14% year to date, were down 11% at 11:25 a.m. on the New York Stock Exchange.
FDC Earnings & Outlook
First Data posted third-quarter net income of $401 million, or $0.42 per share, up 35% from $296 million, or $0.31 per share from the earlier-year period.
Revenue fell to $2.36 billion from $3.1 billion the comparable period a year ago. Analysts had estimated adjusted earnings of $0.23 per share on revenue of $2.34 billion, according to FactSet.
The company’s Network & Security Solutions and Global Financial Solutions segments disappointed with third-quarter revenue declines of 7% and 2%, respectively. However, its Global Business Solutions posted revenue of $1384 million, up 10% from a year earlier.
For the full year, the company sees adjusted earnings of between $1.38 to $1.40 per share, compared with its previous forecast of between $1.42 and $1.47 per share.
It also expects full-year segment revenue growth in the range of 6.3% and 7.3%, compared with its earlier guidance for a growth of between 7% to 8%.