First Data’s first quarter earnings per share rose 22% from a year ago. Western Union money transfers increased 19% worldwide to 20.8 million, driven by a 57% surge in international transfer volume. Merchant card dollar volume processed of $94 billion was up by nearly one-half, aided by the fourth quarter acquisition of Paymentech, an innovator in the card not present and Internet merchant markets. Card accounts on file now exceed 250 million, 20% above a year ago. The backlog of cards to be converted onto First Data’s card processing system in Omaha exceeds 50 million, including GE’s retail cards.
State Street reported excellent first quarter revenue and earnings per share growth of 24%. Assets under custody also rose 24% to $6.2 trillion. Total fiduciary compensation, which makes up three-quarters of fee-based revenue, rose 30% as State Street continues to experience strong growth from existing customers and receives new customer mandates. Fees generated from transaction-based services, including foreign exchange and brokerage, increased 21% and net interest revenue rose 12%. David Spina, State Street’s President, singled out the U.K. unit trust market as a contributor to growth as two years of investment in infrastructure begins to pay off. Last year Lloyds/TSB backed out of the global custody market and assigned State Street its preferred service provider. In addition, Aberdeen Asset Management, with $38 billion of assets, chose State Street for global custody services.
DST posted results which far surpassed forecasts. Earnings per share of 69¢ jumped 33% from a year earlier on strong growth in mutual fund shareowner accounts processed and statements printed and mailed. DST now processes 61 million accounts in the U.S., 3 million in Canada and 2.3 million in the U.K., and provides electronic billing services to 30 customers including E-Trade. DST will convert an additional six million accounts from three customers onto its system this summer.
Sykes allayed investor fears of further disappointment by announcing results that met recent guidance from management. The company posted earnings per share 30% below the prior year on 18% higher revenues. During the quarter Sykes received $20 million from Perot Systems, but will not recognize any portion of this as revenues before next year under the advice of its auditors. Demand for technical support services from PC and software users remains strong. Sykes strategy to integrate electronic support with telephonic appears to be working. Sykes’ top five customers in the first quarter were People PC, Adobe, Microsoft, Compaq and Hewlett-Packard.
Concord EFS reported 18¢ in earnings per share, 50% above a year ago on a 45% rise in revenues to $257 million. These good results, which met management’s forecast, reflect continued growth in all forms of electronic payments including debit, credit, ATM and EBT (electronic benefit transfer such as electronic food stamps). This growth is underscored by the continued trend from cash and checks to electronic payments at supermarkets, gas stations and retailers.
Harte-Hanks reported a 19% increase in earnings per share on 20% revenue growth to $226 million. Demand was especially strong for the company’s response management services from both traditional and Internet companies as direct marketing revenues rose 25% and operating cash flow improved 29%. Harte-Hanks signed significant new agreements with Nortel and 3Com during the quarter. Shoppers experienced strong employment and automotive related advertising, extended its distribution reach and successfully up sold ads onto its website PennysaverUSA.com. Shopper revenues rose 10% and operating cash flow rose 22%.