Leading payment processor First Data Corp., restructured and without its huge Western Union wire-transfer business, late on Wednesday reported fourth-quarter income from continuing operations of $240 million, up 12% from $214.4 million for the year-earlier period. Greenwood Village, Colo.-based First Data's merchant and international divisions posted strong gains, while the slow-growing cardholder-processing side again brought up the rear. On Thursday, First Data disclosed that it bought Size Technologies Inc., a San Francisco-based provider of processing technology for gift cards and merchandise returns, loyalty programs, and stored-value general-purpose cards. Terms of the deal weren't disclosed. In its earnings report, First Data posted net fourth-quarter income of $278.5 million, down 34% from $419.6 million a year earlier. First Data attributed the drop to the September 2006 spin-off of Western Union, its biggest division, as well as one-time charges for debt repayment, restructuring, and impairments. Quarterly revenues grew 14% to $1.92 billion from $1.68 billion in the 2005 period. For the year, First Data reported net income of $1.51 billion, down 12% from $1.72 billion in 2005, on revenues of $7.08 billion, up 8% from 2005's $6.53 billion. First Data Commercial Services, the merchant-processing entity, posted quarterly segment revenues of $1.11 billion, up 10% from a year earlier, and operating profits of $306.3 billion, up 17%. First Data International reported segment revenues of $376.8 million, up 43%, and operating profits of $58.8 million, up 52%. First Data processed 25.5 billion domestic merchant transactions in 2006, up 13% from 22.5 billion in 2005. The company also processed 9.41 billion transactions for domestic debit card issuers, up 19% from 2005's 7.91 billion. The cardholder unit, First Data Financial Institution Services, saw a 10% rise in quarterly revenues to $484.1 million, while operating profits grew 12% to $95.7 million. But for the year revenues and operating profit both slipped 2%. Credit and retail card processing revenues fell 17% from 2005, while debit revenues rose 2% and output-services revenues increased 6%. First Data says the unit is continuing to trim expenses to bring costs in line with revenues.
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