(April 20, 2006) Leading payment card processor First Data Corp., in the midst of a reorganization and spin-off of its Western Union money-transfer business, late Thursday reported first-quarter earnings of $373.3 million, down slightly from $374.5 million in 2005’s first quarter. Revenues grew 10% to $2.70 billion from the year-earlier period’s $2.47 billion. First Data attributed part of the profit decline to a $15 million settlement of a patent lawsuit.

Western Union, First Data’s biggest unit, generated segment revenues of $1.06 billion, up 16% from the year-earlier period, and operating profit of $336.8 million, up 13%. The new First Data Commercial Services, which takes in the merchant-processing unit formerly known as First Data Merchant Services, posted segment revenues of $934.4 million, up 9%, and operating profit of $214.4 million, up 24%.

First Data Financial Institution Services, which includes the slow-growing cardholder-processing business formerly called Card Issuing Services, saw segment revenues decline 5% to $445.2 million and operating profits fall 4% to $84.3 million. The First Data International segment posted revenues of $263.9 million, up 24%, and earnings of $29.1 million, up 35%.

Chief Executive Henry C. “Ric” Duques announced three months ago that Greenwood Village, Colo.-based First Data would spin off Western Union to stockholders later this year to increase shareholder value. At the same time, he launched a reorganization that includes a long-term effort to revitalize the cardholder-processing unit (Digital Transactions News, Jan. 26). Whereas Western Union is heavily involved in consumer-to-consumer payments, the surviving First Data will be a business-to-business payment-services company.

In a statement, Duques said, “We are excited about our performance in the first quarter, especially that of Commercial Services. Results were in line with our expectations and we are pleased with the underlying strength in all of our major segments. Segment revenue growth was 10%, with strong segment operating profit growth of 13%."

Without giving specifics, Duques added that, “We will continue to take positive actions in areas that do not meet our expectations; thereby unlocking the inherent shareholder value within First Data.