First Data Quarterly Loss Narrows After Initial Public Offeringby
First Data Corp., the payments processor that went public this month, said losses in the third quarter narrowed as revenue increased.
The loss attributable to First Data was $126 million, compared with $235 million a year earlier, the New York-based firm backed by KKR & Co. said Monday in its first report as a publicly traded company. Consolidated revenue rose 4.6 percent to $2.92 billion.
Chief Executive Officer Frank Bisignano is under pressure to demonstrate that he’s able to turn around a business laden with debt, growing slower than competitors and facing competition from startups. While results have improved under Bisignano’s leadership and the company continues to invest in new technology, analysts are watching to see how quickly First Data can increase revenue and market share.
“First Data has been losing share in a payments market fueled by strong, secular growth," Lisa Ellis, a Sanford C. Bernstein analyst, said in a note before results were released. “We expect First Data’s business performance to slowly, steadily improve, as the management team makes focused investments to slow share losses."
First Data has climbed 2.3 percent in New York since the stock began trading Oct. 15 following its $2.56 billion initial public offering. The company sold 160 million shares for $16 apiece -- making it this year’s biggest U.S. IPO --- after offering them for $18 to $20 each. KKR’s stake was valued at $4.5 billion at the opening price, or about 15 percent more than the private-equity firm’s investment.
First Data makes most of its money from processing payments for merchants, and it held the top spot by that measure last year, with a 23 percent market share, according to Bloomberg Intelligence. Since Bisignano took over in 2013, he’s cut costs, revamped the company’s operating structure and invested in new technologies, acquiring startups like Gyft Inc., a mobile gift-card company.