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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Western Union Company | NYSE:WU | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.01 | -7.79% | 11.96 | 12.27 | 11.85 | 12.05 | 15,136,851 | 01:00:00 |
By Tess Stynes
Western Union Co.'s (WU) third-quarter earnings rose 12% as the world's largest provider of remittances unveiled a series of new efforts to drive growth and reduce costs.
For the year, the company lowered its per-share earnings estimate to $1.65 to $1.68 on revenue growth of 4% to 5% excluding currency impacts, compared with its increased July view for profit of $1.73 to $1.77 and revenue growth of 6% to 8% excluding currency impacts.
The company also said it is raising its quarterly dividend by 25% to 12.5 cents a share and unveiled a new $550 million stock buyback authorization, bring the potential stock repurchases up to about $750 million through the end of 2013.
Continuing economic problems in Europe and a stagnant U.S. job market have weighed on the payments sector recently. Western Union is particularly sensitive to swings in the economy, as its services are primarily used by consumers to send money to customers typically in foreign locations.
President and Chief Executive Hikmet Ersek on Tuesday said that as the year has progressed "the market environment in consumer money transfer has become more difficult, especially in recent months." As a result, the company is implementing a series of strategic actions, with a focus on enhancing transaction growth, continuing to invest in the fast growing digital channels, and further reducing costs. However, he said the company remains "very confident about the long-term prospects for the business."
The company is aiming to save $30 million a year by 2014 and expects that about $30 million of expenses related to the moves will be incurred during the fourth quarter.
Mr. Ersek said the plans are expected to have a negative impact on results next year and 2013 revenue excluding currency impacts will decline slightly while per-share operating income may drop 10% to 15% from 2012 levels. Western Union plans to give its outlook for 2013 when it releases its fourth-quarter results in February.
Western Union reported a profit of $269.5 million, or 45 cents a share, up from $239.7 million, or 38 cents a share, a year earlier. Excluding items such as integration and restructuring charges, earnings were up at 46 cents from 40 cents.
Revenue increased 0.8% to $1.4 billion. Excluding currency impacts, the growth was 3%.
Analysts polled by Thomson Reuters most recently forecast earnings of 45 cents on revenue of $1.47 billion.
Operating margin was flat at 25.7%.
In the company's consumer-to-consumer segment, its largest business, revenue fell 4% as transactions increased 5%.
Shares closed Friday at $17.93. Markets were closed Monday and Tuesday owing to Hurricane Sandy.
Write to Tess Stynes at tess.stynes@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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