Electronic payment processor CheckFree
Despite wiping the red ink off the books, shares are sliding more than 8% lower after near-term guidance failed to impress. As with Priceline
As the nation's leading electronic billing and payment processing company, CheckFree has teamed up with more than 1,300 banks, brokerage firms, web portals, and other organizations to provide electronic transaction processing services to more than 13 million people. Its platform enables consumers to conveniently pay bills online without the hassle and expense of postage or late fees. Last month the company addedWachovia
CheckFree processed 165.2 million transactions last quarter, an 8% sequential improvement, and 45 million more than were handled in the same period the year before. The number of electronic bills delivered more than doubled from 11.5 million to 25.9 million. Processing and servicing revenues jumped 12.5% for the quarter and 11.4% for the year to $139.5 and $530.2 million, respectively.
Several months ago, CheckFree bought UIL Holding's
Management has reiterated a full-year outlook for a 20% improvement in underlying earnings per share to $1.26-$1.30 and quadrupling of GAAP earnings from $0.11 to between $0.39 and $0.45.
A few of the less obvious numbers, however, are equally noteworthy, such as gross margins that have increased from 41.2% to 59.3% over the last four years, free cash flow that jumped 11% last year to $147.8 million, and a steadily rising number of service providers that has grown from around 950 at this point last year to more than 1,300. Considering each new service provider ultimately leads to more subscribers, and hence, more transactions, this 38% increase should only accelerate volume growth going forward.
Fool contributor Nathan Slaughter has avoided no less than five late fees this year by paying his bills online -- but he owns none of the companies mentioned.