MoneyGram Spreads in Cyprus - Analyst Blog
29 2월 2012 - 9:45PM
Zacks
On Monday, MoneyGram International Inc. (MGI)
announced its expansion in North Cyprus, by adding 10 locations of
the Near East Bank to the company’s money transfer network.
Near East Bank is a respectable financial organization in North
Cyprus and has a strong affiliation with the region’s largest
university – Near East University. As a result, the costumers of
the Near East Bank can send and receive money from 32 convenient
locations of MoneyGram, which are established in North Cyprus.
The expansion is also an attempt to tap the rapidly developing
$400 billion global money transfer industry, which continues to
grow year over year. According to the World Bank, Cyprus is well
placed in the list of top 25 send countries and sent about $2
billion in remittances annually, primarily to Pakistan and
Bulgaria. Hence, MoneyGram intends to explore ample avenues in
Cyprus for network expansion and transaction growth.
Money transfer business remains the driving force for MoneyGram.
The company has been spreading its money transfer business across
the globe through various recognized financial institutions.
Besides, MoneyGram is also enhancing its brand awareness by
developing user-friendly payment solutions that suit the new market
trends. With regard to this growth strategy, the company also plans
to expand its cash-to-account service to additional banks as well
as add new online services.
Furthermore, MoneyGram continues to explore new growth avenues
in untested locations by incorporating latest and flexible
technology that facilitates transfers through mobile phones,
prepaid cards or ATMs, in order to speed up its money transfer
services and enhance the remittance volumes. These efforts also
help to retain the company’s competitive vigour, particularly
against the steady global growth of its arch-rival Western
Union Co. (WU).
Earnings Review
MoneyGram reported fourth-quarter 2011 earnings per share of 4
cents, significantly lower than the Zacks Consensus Estimate of 17
cents but notably higher than the loss of $1.86 in the year-ago
quarter. However, operating income plunged 24.6% year over year to
$36.2 million.
Higher money transfer transaction volumes and higher fee and
other revenue drove the top line, while absence of preferred
dividend payouts, tax benefit and lower interest expenses helped
the bottom line. However, these were mostly offset by lower
investment income along with higher operating and other
expenses.
Going ahead, the Zacks Consensus Estimate for the first quarter
is pegged at 21 cents per share, up about 112% from the year-ago
loss of $1.68 per share. While a couple of downward revisions were
witnessed in the stock, over the last 30 days, one firm revised its
first quarter estimate upward.
Currently, MoneyGram carries a Zacks Rank #3, which translates
into a short-term Hold rating and a long-term Neutral
recommendation on the shares.
MONEYGRAM INTL (MGI): Free Stock Analysis Report
WESTERN UNION (WU): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
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