DST Systems’ profit falls on smaller investment sales

Profits at Kansas City-based DST Systems Inc. declined in the first quarter, largely from a drop in proceeds from investments it holds.

The $58.1 million earned in January, February and March equaled $1.70 a share, compared with $107.8 million, or $2.87 a share, in the same months of 2015.

DST said in its earnings announcement Thursday that the recent total included the impacts of $70.5 million in pretax proceeds from sales of securities it holds and money it earned from private equity investments it has made. A year ago, these proceeds exceeded $100 million in the quarter.

Ignoring the sales and other items, DST said its profits in the quarter were $55.1 million, compared with an adjusted $56.2 million a year ago. Revenues in the recent quarter were $745.8 million, compared with $702.3 million a year ago.

“Overall, we are pleased with our first-quarter operating results, particularly in our health care business, which delivered double-digit growth over prior year,” CEO Steve Hooley said in the earnings announcement. “We have also achieved revenue growth in our financial services segment as the benefits of our recent acquisitions are coming through in this quarter’s results and we continue to generate margin expansion in our customer communications business”

DST did not mention a recent unconfirmed report from Bloomberg News that it was considering a sale of its customer communications business, formerly known as DST Output. A DST spokeswoman had declined to comment on the report at the time.

Shares of DST gained $2.87, or 2.48 percent, to $118.57 after the earnings report. DST provides data processing and other business services to the financial and health care industries.

This story was originally published April 21, 2016 at 11:06 AM with the headline "DST Systems’ profit falls on smaller investment sales."