By Tess Stynes 
 

Western Union Co. (WU) said its first-quarter earnings edged up 0.4% on lower costs but negative currency impacts masked the company's underlying revenue growth.

Englewood, Colo.-based Western Union has faced increased competition in recent years from companies as diverse as PayPal, Apple Inc. (AAPL), and Wal-Mart Stores Inc. (WMT) as it expands from a cash-based business to one with an increased focus on digital payments.

Earlier this year, the company said it will begin international direct-to-bank money transfers to Mexico from the U.S. through Grupo Financiero Banorte SAB's (GBOOY, GFNORTE.MX) UniTeller network, a moves that aims to expand the money-transfer-services company's range of customers in Mexico.

Overall, Western Union reported a profit of $203.9 million, or 39 cents a share, up from $203 million, or 37 cents a share, a year earlier. Revenue decreased 2% to $1.32 billion. However, excluding currency impacts, revenue rose 4%.

Analysts polled by Thomson Reuters expected per-share profit of 38 cents and revenue of $1.31 billion.

Operating margin rose to 20.6% from 20.1%, mostly on cost-savings initiatives. Overhead expenses declined 1.7%, while total expenses dropped 2.8%.

Sales in its consumer-to-consumer business, its largest by revenue, declined 3.6% to $1.04 billion on currency impacts. Transaction volume rose 3%. Consumer-related sales on westernunion.com improved 17% as transactions climbed 25%. Electronic-channel revenue also grew by 17%. The segment includes westernunion.com, account-based money transfers through banks, and mobile money transfer.

Western Union also affirmed its 2015 outlook.

Write to Tess Stynes at tess.stynes@wsj.com

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