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What's in Store for Western Union's (WU) Earnings in Q3?

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The Western Union Co. (WU - Free Report) is set to report third-quarter 2021 earnings on Nov 2, after the market closes.

Q3 Earnings and Revenue Estimates

The Zacks Consensus Estimate for the company’s third-quarter earnings per share is pegged at 58 cents, indicating an increase of 1.75% from the year-ago period’s reported figure. The consensus mark for the same-period revenues stands at $1.31 billion, suggesting 4.09% growth from the year-earlier quarter’s reported number.

Let’s see how things have been shaping up for this announcement.

Western Union has been making heavy investments in its digital money transfer arm and building a leading omni-channel platform for a while now, which yielded results for the company amid the COVID-induced turmoil.

Digital partnerships and constant investments provided a boost to the company’s digital revenues. Based on a robust digital suite, management expects current-year digital revenues to reach around $1 billion, indicating the wave of optimism surrounding the company’s digital business. We thus expect to see increased contribution from the company’s digital platform in the to-be-reported results.

Western Union’s Business Solution segment has been witnessing revenue declines since the past many years, except for the year 2019 when it grew 4%. The same was again down 8% in 2020.

Revenue weakness was the result of dwindled cross-border trade and the adverse impact of the pandemic on education, travel and tourism as well as the small and medium-sized enterprises. Therefore, this segment is likely to have remained stressed through third-quarter 2021.

The company’s margins are expected to have been aided by targeted productivity savings and expense management, led by the WU Way lean program and organizational efficiencies.

Earnings Surprise History

The company’s bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in one), the average beat being 7.08%. This is shown in the chart below:


The Western Union Company Price and EPS Surprise The Western Union Company Price and EPS Surprise

The Western Union Company price-eps-surprise | The Western Union Company Quote

What Our Quantitative Model Predicts

Our proven model does not predict an earnings beat for Western Union this time around. The combination of a positive  Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat but this is not the case here.

Earnings ESP:  Western Union has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our  Earnings ESP Filter.

Zacks Rank:  Western Union carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

The following stocks in the payments space are predicted to surpass estimates this reporting cycle.

PagSeguro Digital Ltd. (PAGS - Free Report) has an Earnings ESP of +31.41% and is presently Zacks #2 Ranked.

Square, Inc. (SQ - Free Report) has an Earnings ESP of +1.05% and a Zacks Rank of 3, presently.

AXOS Financial, Inc. (AX - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank of 2 at present.