First Data Corp (NYSE:FDC) shares gained as much as 5% to close at $13.02 in yesterday’s trading session. This steep share price can be attributed to strong 2Q2016 profit that surpasses analysts’ projections. The stock price has dropped 19% since its initial public offering in last October.
Net income came at $152 million compared to a net loss of $26 million in the same quarter, a year earlier. Adjusted profit amounted to 35 cents a share, surpassing by one cent from the average projection of 23 analysts. Revenue jumped 1.9 percent to $2.93 billion in 2Q2016.
The management speaks
Frank Bisignano, the Chairman and CEO of First Data, said that 2Q2016 results were supported by strong cash flow generation, healthy margin expansion and net income growth. They witnessed remarkable growth in Latin America, and Global Financial Solutions, and continued customer momentum in the enterprise segment. Bisignano added that they continue to scale and execute various strategic measures in North American merchant operations and stay confident these measures will lead to visible improvement.
The performance
In the global financial solutions segment, revenue jumped 12% to $395 million in 2Q2016. It increased 14% in terms of constant-currency basis. However, in the broader global business solutions segment, revenue declined 1.8% to $1.04 billion in 2Q2016, but was flat ignoring currency impact.
Segment revenue surged 1.9% to $1.8 billion in 2Q2016. Analysts were expecting segment revenue to come at $1.81 billion. The leading market analysts reported that top-line performance was in-line with their projections with the bottom line surpassing the street and model on strong expenses management.
First Data have revamped top management numerous times after its takeover. In 2013, the firm named Frank Bisignano as its Chief Executive Officer. KKR and others supported Bisignano with an additional cash investment of $3.5 billion in the firm last year.
