Western Union Q2 Results Fall Short Of Wall Street View

Western Union Co. (WU) Thursday said its second-quarter profit rose 31% driven largely by strong consumer money transfer business and a one-time settlement amount. Nevertheless, earnings for the quarter fell short of estimates by a penny, while revenues also failed to meet expectations.

Englewood, Colorado-based Western Union’s second-quarter profit surged to $217.6 million or $0.47 per share from $166.5 million or $0.35 per share last year.

On an adjusted basis, earnings dropped to $0.46 per share from $0.50 per share last year. On average, 18 analysts polled by Thomson Reuters expected earnings of $0.47 per share for the quarter. Analysts’ estimates typically exclude one-time items.

Profit for the quarter increased primarily due to a NYDFS settlement accrual and WU Way related expenses incurred in the prior year period, the company said in a statement. Adjusted earnings dropped primarily due to a lower adjusted operating profit margin and higher adjusted tax rate in the current year period.

Revenues for the quarter rose 2 percent to $1.41 billion from $1.38 billion last year. Analysts had a consensus revenues estimate of $1.43 billion.

CFO Raj Agrawal stated, “We delivered solid 20% operating margins in the quarter and utilized our strong free cash flow to return significant funds to shareholders. We are continuing to drive financial performance while investing in our long-term strategic initiatives.”

Consumer-to-Consumer revenues, which represented 80% of total revenue, increased 4%, while transactions grew 5%. Geographically, constant currency revenue growth was led by sends originated in Latin America, Europe, and North America, partially offset by declines in the Middle East and Africa.

Looking forward to the full year, Western Union now expects earnings growth to be in low single-digit range, compared to previous outlook of low to mid single digit increase. The company continues to expect adjusted earnings of $1.80 to $1.90 per share. Analysts currently estimate earnings of $1.87 per share and revenues growth of 3.90%.

WU closed Thursday’s trading at $20.59, up $0.44 or 2.18% on the NYSE. The stock, however, dropped $0.59 or 2.87% in the after-hours trading.

by RTTNews Staff Writer

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