Post Earnings Coverage as First Data Corp Tops Market Expectation on Reduced Debts

LONDON, UK / ACCESSWIRE / August 2, 2016 / Active Wall St. announces its post-earnings coverage on First Data Corp. (NYSE: FDC). The company issued its second quarter fiscal 2016 earnings results on August 01, 2016. The global payment technology solutions company reported better than expected earnings amid strength in its global financial solutions. The company has also reduced the mountain of debt that hampered its ability to generate profits. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the quarter ended on June 30, 2016, First Data posted earnings of $152 million, or $0.17 per share, as compared to a loss of $26 million in the year ago period. Excluding items such as debt extinguishment charges, stock-based compensation, amortization of acquisition intangibles, restructuring costs and other items, adjusted income surged 124% to $323 million, or $0.35 per share, slightly beating analysts’ forecast of $0.34 per share. For Q2 FY16 revenue rose 1.9% to $2.93 billion. First Data’s segment revenue climbed 1.9% to $1.8 billion, or 4% excluding currency effects. Analysts were looking for $1.81 billion in segment revenue.

For First Data’s global financial solutions division, revenue jumped 12% to $395 million in Q2 FY16. Meanwhile, revenue slipped 1.8% to $1.04 billion, in the global business solutions segment.

Chairman and CEO, Frank Bisignano, commented, ”We continue to implement and scale a number of strategic initiatives in our North American merchant business and remain confident these will drive visible improvement.”

Second Coming

First Data returned to Wall Street in October 2015 after an eight-year spell as a private company owned by private equity firm KKR & Co. L.P. KKR & Co. acquired First Data for about $26 billion in 2007, in one of the largest leveraged buy-outs in the history, the deal kept First Data in the red for years.

After the purchase, First Data shuffled top management several times. In 2013, the company announced former J.P. Morgan Chase executive Frank Bisignano as CEO. In June 2014, KKR led a $3.5 billion private placement for First Data to help the company to repay its debt and strengthen its balance sheet.

First Data which processes 2500 transactions per second with a global footprint in 118 countries priced its share at $16 on October15, 2016, below an expected range of $18 to $20, raising about $2.8 billion, including overallotment shares, in what would be 2015’s largest IPO.

Reducing Debt

The Georgia headquartered firm’s results reflect the work undertaken to reduce its debt and how well it has panned out. Since its IPO, First Data have refinanced or restructured billions of dollars of debt. First Data’s cash interest payments through the first half of 2016 were $480 million, about 36% less than the year ago period.

First Data’s chief financial officer, Himanshu Patel, stated that progress made in business operations and lower interest expense has provided the company with $519 million worth of free cash flow through the first half of 2016 compared to just $6 million in the year ago period.

“Our net debt outstanding today is $300 million lower than it was six months ago, and most of this reduction occurred in the second quarter,” Mr. Patel said on a conference call with analysts.

Stock Performance

Following the earnings release, First Data’s shares surged 5.00% closing the session at $13.02 on August 01, 2016. A total of 10.76 million shares were traded on the day, which was higher than the average volume of 5.85 million shares. The company’s stock has soared 17.62% in the past one month.

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