Brookfield, Wis., Jan. 30, 2006âFiserv, Inc. (Nasdaq: FISV) today reported record revenues and earnings for 2005. Processing and services revenues for the full year increased 11% to $3.71 billion compared to $3.35 billion in 2004. Full-year earnings per share were $2.70 and earnings per share from continuing operations were $2.68. Full-year adjusted earnings per share from continuing operations were $2.30 (which excludes $0.29 per share related to realized gains from sale of investments and $0.09 per share for receipt of a large contract termination fee) versus $2.00 in 2004.
Revenues for the quarter increased 14% to $987.7 million (which includes a large contract termination fee received of $26.3 million) compared to $866.1 million in the fourth quarter of 2004. Earnings per share for the fourth quarter of 2005 were $0.81 and earnings per share from continuing operations were $0.80. Adjusted earnings per share from continuing operations were $0.56 (excluding $0.15 per share related to a realized gain from sale of investment and $0.09 per share for the large contract termination fee), compared to $0.50 for the fourth quarter of 2004.
âI am pleased with our strong fourth quarter, which led to record results for the full year. Each of our business segments delivered revenue growth led by strong organic growth in our financial institutions area,â said Jeff Yabuki, president and chief executive officer of Fiserv. âIn addition to delivering strong results in 2005, we continued to make investments that will enhance the long-term strength of the Company.â
âWe broadened our capabilities and reach in the electronic bill payments space through our acquisition of BillMatrix; increased our global presence by establishing Fiserv Global Services; solidified our technology leadership in the lending business through a unique, end-to-end, electronic mortgage processing solution; and introduced the Fiserv Clearing Network, which allows members the ability to clear checks electronically, and more efficiently, under Check 21. In 2006, we announced the acquisition of CareGain, which provides us with a differentiated healthcare technology solution to support the strong growth occurring in consumer-driven health plans through a focus on health savings and health reimbursement accounts,â Yabuki said.
Fiserv repurchased 4.4 million shares of its common stock in the fourth quarter of 2005 and a total of 15.2 million shares in 2005. The Company had 3.1 million shares authorized for repurchase at December 31, 2005 under the current stock buy back plan.
OUTLOOK FOR 2006
For 2006, Fiserv expects full-year earnings to be within a range of $2.46 to $2.53 per share (which includes the effect of incremental share-based compensation expense which is estimated to be $0.09 to $0.11 per share). The 2005 pro forma effect of incremental share-based compensation expense would have reduced adjusted earnings per share from continuing operations by $0.11 per share from $2.30 to $2.19 per share. The incremental share-based compensation expense is a result of the Company adopting Statement of Financial Accounting Standards (âSFASâ) No. 123R on January 1, 2006. We project internal revenue growth rates in 2006 to be in the mid-single digits for the Financial and Investment segments and low double digits in the Health segment.
FINANCIAL SEGMENT SALES HIGHLIGHTS
Fiserv enjoyed a strong fourth quarter for new-client signings. Fiservâs CBS Worldwide unit signed core-processing agreements with several banks, including 1st Source Bank, $4.5 billion in assets, South Bend, Ind.; First National Bank of Long Island, $1 billion in assets, Long Island, N.Y.; Riverview Community Bank, $864 million in assets, Vancouver, Wash.; and Pulaski Bank, $750 million in assets, St. Louis, Mo. Also in the quarter, Fiservâs Information Technology, Inc.
(ITI) unit logged core-processing agreements with four Montana banks with total assets of $837 million: Heritage Bank, First National Bank of Montana, Valley Bank of Kalispell and Three Rivers Bank of Montana. In addition, Coastal Federal Bank, $1.5 billion in assets, Myrtle Beach, S.C., expanded its already significant relationship with Fiserv to include ATM/debit processing; and Standard Bank of South Africa, a $105 billion asset bank based in Johannesburg, chose Fiserv's IPS-Sendero unit for a package of risk management software.