First Data Corp. on May 2 reported a first-quarter loss of $153 million, narrowing from a loss of $217 million a year earlier, as its operating income improved.
The Atlanta-based processor said an increase in merchant-acquiring revenue led to overall revenue rising 1%, to $2.6 billion, from a year earlier. Its operating profit rose 104%, to $217 million. This was offset by a 4% increase, to $461.1 million, in interest expense.
First Data's retail and alliance services revenue rose 11%, to $847 million, as merchant revenue increased 17%. Product revenue declined 3%, to $203 million, as revenue from prepaid cards remained flat but check-processing fees declined. Revenue for the company's international segment fell 3%, to $405 million.
Revenue for First Data's financial-services segment rose 2%, to $346 million, as new business and volume growth offset lost business and price compression. A new-customer conversion drove a 17% increase in active card accounts on file.
First Data said that in January it renewed a long-term merchant services partnership with SunTrust Merchant Services, a unit of SunTrust Banks. Under the deal, First Data will continue to manage day-to-day operations, risk management and merchant sales activities while SunTrust will build its business through client-facing channels, including its retail branches.
"Based on the bank's 1,650 locations throughout the southeast and mid-Atlantic regions, SunTrust merchant services serves over 67,000 merchants and contributes significantly to the breadth of our distribution capability in the United States, which counts over 24,000 bank branches in all," said Jon Judge, First Data's chief executive, in a conference call Wednesday.
First Data is a unit of the Kohlberg Kravis Roberts private-equity firm.
Jeremy Quittner contributed reporting to this story.
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