Merger Costs Send First Data Profits Down

Payments processor First Data Corp. reported yesterday third quarter income of $35 million, down 73 percent due primarily to $208 million after-tax merger related costs. First Data was purchased during the quarter by a subsidiary of Kohlberg Kravis Roberts & Co. Revenues rose 16 percent to $2.1 billion.

Income from continuing operations excluding the impact of the merger was $243.2 million, up 85 percent from $131.3 million a year ago.

The Commercial Services group reported revenues of nearly $1.1 billion and profits of $294 million, both results virtually unchanged from the same period a year ago.

The Financial Institutions Services unit reported revenues of $502.1 million, up 10 percent from $455.2 million. Operating profits declined 9 percent to $87.5 million.

First Data International reported revenues of $425.2 million, up 28 percent from $331.9 million. Profits for the group were $38.5 million, up from $32.1 million.

Michael Capellas, the chairman and CEO, said in a statement that First Data is a technology company that will aggressively roll out new products and simplify its sales approach.