First Data Reports First Profit in 29 Quarters Since Going Private

Leading payment processor First Data Corp. late Tuesday reported its first quarterly profit since being taken private in a $29 billion leveraged buyout by investment firm Kohlberg Kravis Roberts & Co. in 2007.

Net income wasn’t big, $11.8 million, but it beat the $123.1 million loss Atlanta-based First Data reported in 2013’s fourth quarter. Revenues increased 2% to $1.05 billion from $1.02 billion a year earlier.

“Our historic fourth quarter, and the year as a whole, demonstrated the continued transformation of First Data,” chairman and chief executive Frank Bisignano said in a statement. “This past year saw the launch of numerous new products, the development of strategic partnerships, and a significantly strengthened capital position. We look to 2015 and beyond with great anticipation as we leverage our assets, relationships, and innovative solutions to help drive the future of commerce.”

Much of First Data’s cash over the past seven years has gone to servicing its enormous debt from the LBO, which came just before the U.S. financial crash. Interest expense totaled $405.2 million in the fourth quarter and $1.74 billion for the year. First Data has been chipping away at its debt—long-term borrowings currently stand at $20.7 billion, down from $22.6 billion at the end of 2013. Last year it received a $3.5 billion equity infusion from KKR, adding fuel to persistent speculation that the company is preparing for an initial public offering of stock.

Quarterly operating profit, revenues minus most expenses except interest and miscellaneous items, jumped 17% to $420.1 million from $357.7 million a year earlier.

Merchant processing remains First Data’s biggest business, with Merchant Solutions fourth-quarter segment revenues increasing 1% to $946.6 million. The Financial Services segment, with provides card-issuer processing and debit services, saw an 8% rise in revenues to $383.3 million. The International segment posted revenues of $473.2 million, up 4%.

Although First Data’s stock doesn’t trade, the company still reports financials publicly. First Data executives are scheduled to hold a conference call with analysts Wednesday at 8:00 a.m. Eastern.