Fiserv’s Guidance for 2013

Seeking Alpha has posted the transcript of yesterday’s earnings call for Fiserv ($FISV). Here’s a key part on the company’s outlook for this year.

We expect 2013 adjusted revenue to increase by more than 10%, and that adjusted internal revenue growth will be in a range of 3% to 4%. These numbers include approximately $50 million in lost revenue, more than 100 basis points of internal growth this year due to the unusual migration of an account processing client that transitioned to its parent’s account processing platform and the impact of the 10-year Bank of America renewal.

We expect 2013 adjusted earnings per share growth of 15% to 18% or a range of $5.88 to $6.07 over 2012. We estimate free cash flow per share will be more than $6.60 per share, an increase of at least 18% over 2012. We expect adjusted operating margin to expand in a range of 10 to 50 basis points. This estimate includes the approximately 60-basis-point negative impact from the revenue headwind and also margin dilution associated with the Open acquisition.

For modeling purposes, we anticipate that our revenue and earnings growth will be sequentially stronger each quarter as we move through the year. A number of our larger recurring revenue client conversions are planned for the second and third quarters of 2013, and the impact of the negative headwinds are also more pronounced in the first half of the year. We also expect the Open Solutions results to increase during the year, consistent with their normal business model, the cumulative effect of integration benefits and the pay-off of the higher cost debt.

We’re in the process of realigning the specific annual targets for our operational effectiveness and integrated sales targets to consider the Open Solutions acquisition. Accordingly, we are now prepared to communicate annual targets for 2013. However, you can be sure we are very focused on these initiatives and we’ll provide you with an update at the end of the quarter — sorry, at the end of the first quarter.

In summary, 2012 was a good year. We made strategic progress, grew recurring revenue, achieved our earnings targets and closed a number of significant sales, all which we believe will accelerate our internal revenue growth, earnings and cash flow. We are starting to see measurable impact from some of our investments and innovation, and are delivering more value to clients. We are also focused on the integration of Open Solutions, which should allow us to deliver new and enhanced value to their more than 3,300 clients. That, combined with the commitment of our more than 20,000 associates, is creating momentum, which should lead to strong results in 2013, and has lifted our confidence for 2014 and beyond.

This was a good quarter for Fiserv. The stock is currently down about 0.6% today.

Posted by on February 6th, 2013 at 10:23 am

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