Alliance Data 3Q profit drops 29 pct as sales fall

Alliance Data says 3rd-qtr profit fell 29 pct as sales declined; Canadian dollar hurt profit

• On 7:00 pm EDT, Wednesday October 21, 2009

DALLAS (AP) -- Marketer Alliance Data Systems Corp. said Wednesday its third-quarter profit fell 29 percent as sales fell and it was hurt by unfavorable foreign exchange rates, especially the strength of the Canadian dollar in comparison to the U.S. dollar.

The shares dropped in aftermarket trading.

The Dallas-based marketing company earned $45.8 million, or 83 cents per share, in the quarter ended Sept. 30. That is down from the $64.8 million, or 93 cents per share, it earned a year earlier.

Adjusted profit was $1.44 per share, beating a $1.34 per share consensus estimate of analysts polled by Thomson Reuters. The company said the adjusted profit excluded changes in the exchange rate for the Canadian dollar. Net income was hurt when Canadian dollars were translated into U.S. dollars.

Alliance is the parent company of LoyaltyOne, which owns and operates a Canadian loyalty program called the Air Miles Reward Program.

Revenue fell 5 percent to $483.2 million from $511.2 million. Analysts had expected $500.2 million.

The company said it was also hurt by higher credit losses than in the same period in 2008.

For all of 2009, the company expects $5.15 per share in profit, compared with an analyst prediction of $5.05 per share. For fiscal 2010, Alliance Data said it anticipates per-share profit of $6 per share, compared with $6.10 per share expected by Wall Street.

Alliance Data shares fell $4.26, or 6.3 percent, to $63 in aftermarket trading after closing at $67.26, down 27 cents, in the regular session.

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