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Fidelity National Information Services I Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 4, 2011 04:36PM

Fidelity National Information Services I (FIS) filed Quarterly Report for the period ended 2011-06-30. Fidelity Natl Information Services has a market cap of $8.86 billion; its shares were traded at around $28.99 with a P/E ratio of 13.4 and P/S ratio of 1.6. The dividend yield of Fidelity Natl Information Services stocks is 0.7%.



Highlight of Business Operations:

Cost of revenues totaled $1,007.5 million and $893.2 million during the three-month periods and $2,003.5 million and $1,783.6 million during the six-month periods ended June 30, 2011, respectively, resulting in gross profit of $434.2 million and $377.8 million during the three-month periods and $821.6 million and $722.4 million during the six-month periods ended June 30, 2011 and 2010, respectively. Gross profit as a percentage of revenues (“gross margin”) was 30.1% and 29.7% in the three-month periods and 29.1% and 28.8% during the six-month periods ended June 30, 2011 and 2010, respectively. The increases in cost of revenues of $114.3 million and $219.9 during the three-month and six-month periods ended June 30, 2011 as compared to the 2010 periods are directly attributable to the revenue variances addressed above.

Selling, general and administrative expenses totaled $175.3 million and $193.7 million during the three-month periods and $348.8 million and $350.9 million during the six-month periods ended June 30, 2011 and 2010, respectively. The decreases of $18.4 million and $2.1 million during the three-month and six-month periods ended June 30, 2011 as compared to 2010 were primarily due to restructuring and integration costs associated with merger and acquisition activity and expenses in connection with our 2010 leveraged recapitalization included in the 2010 periods, partially offset by incremental operating costs in 2011 resulting from the 2010 acquisitions. Additionally, the 2011 six-month period included a $13.0 million loss related to unauthorized activities on the Sunrise prepaid card platform.

Participacoes had revenues of $2.0 million and $15.1 million during the three-month periods and $11.7 million and $29.6 million during the six-months ended June 30, 2011 and 2010, respectively. Participacoes had operating expenses of $11.0 million and $22.3 million for the three-month periods and $25.5 million and $40.6 million during the six-month periods ended June 30, 2011 and 2010, respectively. Participacoes' processing volume was transitioned to other vendors or back to its customers during the second quarter of 2011. We expect to have continued exposure to labor claims, which were not transferred with other assets and liabilities in the disposal, for approximately two years. Any changes in the estimated liability related to these labor claims will also be recorded as discontinued operations.

Earnings from continuing operations, net of tax, attributable to FIS common stockholders totaled $129.3 million and $94.9 million for the three-month periods ended June 30, 2011 and 2010, respectively, or $0.42 and $0.25 per diluted share, respectively, due to the factors described above. Earnings from continuing operations, net of tax, attributable to FIS common stockholders totaled $225.4 million and $192.0 million for the six-month periods ended June 30, 2011 and 2010, respectively, or $0.73 and $0.50 per diluted share, respectively, due to the factors described above.

Revenues for ISG totaled $293.0 million and $185.7 million during the three-month periods and $561.1 million and $366.1 million during the six-month periods ended June 30, 2011 and 2010, respectively. The overall segment increases of $107.3 million during the three-month period and $195.0 million during the six-month period ended June 30, 2011 as compared to the 2010 periods resulted primarily from incremental Capco revenues, increased credit card volumes in Brazil, growth in professional services and higher license revenue. The three-months and six-months ended June 30, 2011 also included $27.4 million and $37.4 million, respectively, of favorable foreign currency impact resulting from a weaker U.S. Dollar during the 2011 periods.

On January 18, 2007, FIS entered into a syndicated credit agreement, which was amended on July 30, 2007, and amended and restated on June 29, 2010 (the “FIS Credit Agreement”). The FIS Credit Agreement, as of June 30, 2011, provides total committed capital of $4,647.5 million comprised of: (1) revolving credit facilities in an aggregate maximum principal amount of $1,033.7 million (together, the “Revolving Loans”), consisting of $112.3 million in revolving credit capacity maturing on January 18, 2012, and $921.4 million in revolving credit capacity maturing on July 18, 2014; (2) an aggregate of $3,613.8 million of term notes consisting of $325.0 million maturing on January 18, 2012 (“Term Loan A-1”), $1,800.0 million maturing on July 18, 2014 (“Term Loan A-2”), and (3) $1,488.8 million maturing on July 18, 2016 ("Term Loan B"). As of June 30, 2011, the outstanding principal balance of the Revolving Loans was $111.7 million, with $907.0 million of borrowing capacity remaining thereunder (net of $15.0 million in outstanding letters of credit issued under the Revolving Loans). See Note 6 in the Condensed Consolidated Financial Statements (Unaudited) under Item 1 for information regarding the interest rates of the loans.

Read the The complete Report



Stocks Discussed: FIS,
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