Summary
Fiserv, Inc. reported solid revenue growth in the second quarter of 2019, with total revenue increasing by 6% year-over-year to $1.51 billion. This growth was primarily driven by the Payments segment, which saw a 10% increase, benefiting from the recent acquisition of Elan Financial Services and strong performance in card services and electronic payments. The Financial segment experienced more modest growth. Despite revenue increases, net income for the quarter declined to $223 million from $251 million in the prior year, impacted by increased interest expenses and debt financing activities related to the significant pending acquisition of First Data Corporation. For the six-month period, total revenue grew by 5% to $3.01 billion, but net income saw a substantial decrease to $448 million from $674 million in the same period last year. This decline is largely attributable to higher interest expenses, debt financing costs associated with the First Data acquisition, and the absence of a large gain on sale of business recorded in the prior year. Investors should closely monitor the integration of the First Data acquisition, as it represents a major strategic move that will significantly impact Fiserv's financial structure and future growth prospects. The company also reported a substantial increase in long-term debt, reflecting the financing for the First Data deal.
Financial Highlights
48 data points| Revenue | $1.51B |
| SG&A Expenses | $343.00M |
| Operating Expenses | $1.13B |
| Operating Income | $384.00M |
| Interest Expense | $64.00M |
| Net Income | $223.00M |
| EPS (Basic) | $0.57 |
| EPS (Diluted) | $0.56 |
| Shares Outstanding (Basic) | 392.50M |
| Shares Outstanding (Diluted) | 399.60M |
Key Highlights
- 1Total revenue for Q2 2019 increased by 6% to $1.51 billion, and by 5% to $3.01 billion for the first six months of 2019.
- 2Net income for Q2 2019 decreased to $223 million ($0.56/share diluted) from $251 million ($0.60/share diluted) in Q2 2018. For the first six months, net income decreased to $448 million ($1.12/share diluted) from $674 million ($1.61/share diluted).
- 3The company significantly increased its long-term debt, rising to $13.76 billion as of June 30, 2019, compared to $5.96 billion at December 31, 2018, primarily due to financing for the pending First Data acquisition.
- 4Operating income for Q2 2019 rose 7% to $384 million, but operating income for the first six months of 2019 decreased 22% to $757 million, impacted by gains on sale of business in the prior year.
- 5The acquisition of First Data Corporation, valued at approximately $22 billion, was announced and was nearing completion, expected around July 29, 2019.
- 6Interest expense increased significantly in both the quarter and year-to-date periods due to new debt issuances related to the First Data acquisition financing.
- 7The company adopted the new lease accounting standard (ASC 842) effective January 1, 2019, resulting in the recognition of $383 million in lease liabilities and $343 million in right-of-use assets.