By Victoria Stilwell
Western Union Co.'s (WU) second-quarter profit rose 3% on higher
revenue and an increase in transactions at its consumer
money-transfer business.
The company raised its earnings outlook for the full year, now
seeing adjusted per-share earnings in the range of $1.73 to $1.77,
down from an earlier prediction of $1.70 to $1.75.
The company said its Middle East and Africa, Asia Pacific and
Latin America regions performed well as did its online money
transfer business, offsetting the impact of consumer slowdowns in
Southern Europe and expected weakness in other countries.
Western Union has seen results mostly improve as the U.S. shows
signs of a tenuous recovery from the recent financial crisis.
Payment transfer activity is on the rise, and the company is
expanding its worldwide presence. The company in May unveiled a
deal with Allianz SE (ALV.XE) to develop and distribute insurance
products in locations such as the Middle East and Africa.
Business-related payments, which represent 5% of Western Union's
revenue today, have become a bigger focus for the company, which
bought the business-to-business payments unit of Travelex Holdings
Ltd. in November for about $970 million. The company is trying to
capture more business from small and medium-sized enterprises that
need to send money to partners overseas.
For its second quarter, Western Union reported a profit of
$271.2 million, or 44 cents a share, up from $263.2 million, or 41
cents a share, a year earlier. Excluding Travelex
integration-related expenses, earnings were 46 cents a share versus
42 cents a share a year earlier. Revenue increased 4.3% to $1.43
billion.
Analysts surveyed by Thomson Reuters recently expected a
per-share profit of 43 cents on revenue of $1.45 billion.
Operating margin narrowed to 24.3% from 25.7%.
In the company's consumer-to-consumer segment--its largest
business--revenue was roughly flat as transactions increased about
4%. The segment grew 3% on constant currency.
Consumer-to-business revenue declined 2.7%. Business solutions
revenue almost tripled.
Shares closed Monday at $16.95 and were inactive in premarket
trade. The stock is off 12% in the last 12 months.
Write to Victoria Stilwell at Victoria.Stilwell@dowjones.com
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