Hurricane Katrina likely will lower earnings at Greenwood Village-based First Data Corp., chief executive and chairman Charlie Fote told a gathering of company analysts Thursday in Denver.
First Data’s Western Union Financial Services subsidiary has halved the fees for money transfers into Mississippi, Louisiana and Alabama during September and is moving charitable money transfers to the Red Cross for free.
“We lowered prices or gave away transactions,” Fote said. “We could see an impact.”
Additionally, the storm affected about 3 percent of Western Union’s money-transfer agent locations in the United States and 1 percent of the merchant customers who process credit- and debit-card transactions through First Data, Fote said. Some of the locations were closed temporarily; others remain closed.
The storm and its aftermath could shave 1 cent to 3 cents off the company’s earnings per share, Fote said. That translates into $7.5 million to $23 million off earnings based on estimated earnings of $466 million.
First Data hosted about 100 analysts and investors at the Pinnacle Club in Denver to discuss its international operations.
The company is trying to leverage its network of 238,000 Western Union locations to benefit its international credit-card issuance and transaction-processing business.
“We have the network,” said Christina Gold, president of Western Union. “We want to maximize it.”
Gold said the company is seeing more money transfers within and out of countries such as Mexico and Russia that were typically on the receiving end.
Russia is generating twice as many outbound money transfers as inbound, Gold said.
Western Union also continues to see rapid growth in India and China, where it has invested heavily to build an agent network.
Analysts questioned Fote about the option of spinning off the company’s international business lines into a separate company as a way to create more value for shareholders.
Some investors may still be waiting to see how well the company integrates Concord EFS, a $7 billion debit-card and ATM network acquisition completed in early 2004, said Fote, who urged patience.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
