DOW JONES NEWSWIRES
Fiserv Inc.'s (FISV) second-quarter earnings rose 40% as lower expenses were able to offset a steep drop in revenue.
The company, which provides information technology to the financial and insurance industries, has sought shelter in its core banking business during the economic downturn.
The product of more than 100 acquisitions has sold its less profitable operations, such as mortgage and health-management, to pay down debt. Last summer, Fiserv sold a majority stake in its insurance business. The company is best known for its technology used to electronically post checks, open accounts and track loans.
Fiserv reported earnings of $140 million, or 90 cents a share, up from $100 million, or 60 cents a share, a year earlier. Earnings from continuing operations rose to 73 cents a share from 62 cents.
Revenue declined 20% to $1.03 billion.
Analysts polled by Thomson Reuters projected per-share earnings of 88 cents on revenue of $1.04 billion.
Excluding items, operating margin rose 1.9 percentage points to 27.9%.
Processing and services revenue slid 9.2% while product revenue slumped 50%.
Meanwhile, total expenses dropped 25% to $800 million.
In addition to its bottom-line struggles, Fiserv is dealing with a complicated court battle over its years-old involvement with Bernard Madoff's investment firm. Fiserv Investment Support, a unit Fiserv sold in 2007, was named in a lawsuit claiming an investment consultant warned the company about potential messy bookkeeping by Madoff. The suit seeks recovery of up to $1 billion. Fiserv itself hasn't been charged with any wrongdoing, though the lawsuit alleges that Fiserv Investment should have known about the problems and should be held liable for its customers' losses.
Shares of Fiserv, which backed its full-year earnings forecast, closed Wednesday up 1.8% at $50.44 and were inactive after hours.
-By Melissa Korn and Lauren Pollock, Dow Jones Newswires; 212-416-2356; lauren.pollock@dowjones.com