Broadridge sales up, profits down following merger

Broadridge Financial Solutions Inc. on Wednesday reported a lower profit for the October-December period compared with a year earlier due to costs from a big acquisition and interest payments on debt.

The Lake Success-based business said its profit was $30 million in the three months ended Dec. 31, a drop of 25 percent from the same quarter in 2015.

Broadridge delivers proxy statements, annual reports and other documents to shareholders on behalf of public companies. It also processes financial transactions for banks and other institutions and offers tax reporting services.

The company’s sales soared in the October-December period to $893 million, a 40 percent increase from a year earlier.

Executives attributed the sales gain in part to the company’s purchase of the North American Customer Communications unit of DST Systems Inc. of Kansas City, Missouri, which accounted for $267 million in sales in the quarter.

They also said expenses from the $410 million acquisition had depressed profits in the three months ended Dec. 31, along with higher interest payments and less revenue from mutual fund events.

“We reported strong revenue growth, driven by the acquisition of NACC and organic growth of our recurring fee revenues,” said CEO Richard J. Daly. “Our success reflects the broadening of our product lineup and deepening our relationships with key clients.”

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He also said there could be a positive financial impact to Broadridge of the proposed purchase of Scottrade Financial Services Inc. by TD Ameritrade Holding Corp. Both are Broadridge customers, and under the terms of the proposed deal Scottrade would switch some of its operating systems to Broadridge.

“There’s a lot of moving parts here...and although we have some idea of what their preferred direction is, until it’s final, we don’t know,” Daly said in a teleconference with stock analysts.

Broadridge employs about 2,000 people locally, many of them at facilities in Edgewood.

The company’s shares closed down 31 cents, or less than 1 percent, to $68.18 on the New York Stock Exchange on Wednesday. In the past 12 months, the shares are up more than 32 percent.