Fiserv Cites Contract Changes, CheckFree Buy For Dip In Income
Fiserv Inc. yesterday reported net income of $99 million for the second quarter ended June 30, down 8.3% from $108 million for the same period last year. The Brookfield, Wis.-based transaction processor says revenue rose 38.4%, to $1.3 billion from $939 million. Expenses rose 41.3%, to $1.07 billion from $757 million. Fiserv attributed part of the decline in net income to repricing in its electronic bill payment contract with Bank of America Corp. Costs related to Fiserv's December 2007 acquisition of CheckFree Corp., an online banking and recurring electronic-payments processor, also nicked Fiserv's bottom line, Fiserv disclosed in its earnings report. Fiserv did not disclose specific CheckFree earnings or expenses but explained that lower interest rates cut the revenue from consumer bill payment funds resting in CheckFree accounts for a couple of days before moving on to billers. But CheckFree also added payments-related revenue during the quarter, Jeffery Yabuki, Fiserv president and CEO, told analysts in a conference call yesterday. "We are now seeing a revenue uplift by providing integrated products into the larger [financial] institutions, which were traditionally served by CheckFree," Yabuki said. Thomas Hirsh, Fiserv executive vice president, chief financial officer and treasurer, told analysts that CheckFree generated 311 million bill-payment transactions during the quarter, up 13% from the same period last year.