Western Union Co. reported better-than-expected earnings in its
most recent quarter, driven by growth in its digital presence.
The company raised its outlook for the year, despite reporting
lower revenue hurt by a stronger U.S. dollar. For the year, the
company now projects per-share earnings between $1.60 and $1.67, up
from its prior range of $1.58 to $1.65.
Shares rose 2% to $19.40 in after-hours trading.
The company also recently recorded after tax charges of $24.2
million related to a settlement with the Consumer Financial
Protection Bureau. The CFPB had claimed certain aspects of the
marketing of Western Union's Payment subsidiary's Equity
Accelerator service violated the Consumer Financial Protection
Act's prohibition against unfair, deceptive and abusive acts and
practices.
Western Union has faced increased competition in recent years,
as it expands from a cash-based business to one with an increased
focus on digital payments. PayPal's announcement of plans to
acquire Xoom creates a large global competitor for Western Union in
money transfer.
For the quarter ended June 30, the company reported earnings of
$189.3 million compared with $193.8 million a year earlier.
Per-share earnings were flat at 36 cents. Excluding charges,
earnings were 41 cents a share. Revenue fell 2% to $1.38
billion.
Analysts polled by Thomson Reuters were looking for 39 cents a
share on $1.36 billion in revenue.
Excluding the impact of charges from the CFPB settlement,
operating margins rose to 20.7% from 19.8%.
Write to Neil Haggerty at neil.haggerty@wsj.com
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