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MoneyGram (MGI) Q3 Earnings Beat Estimates, Revenues Miss
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MoneyGram International, Inc. reported third-quarter 2021 adjusted earnings per share of 13 cents, which beat the Zacks Consensus Estimate by 62.5%. Earnings were down 18.8% year over year.
Year over year, earnings declined due to lower revenues and a rise in operating expenses.
MoneyGram International Inc. Price, Consensus and EPS Surprise
Revenues of $319.6 million were down 1.1% year over year due to lower fee and other revenues. It also missed the Zacks Consensus Estimate by 3.24%.
Total operating expenses of $122.3 million increased 9% year over year, primarily due to higher transaction and operations support cost. Interest expense dropped 43.5% year over year to $13 million in the quarter under review.
Adjusted EBITDA of $56.5 million fell 17.9% year over year due to $33.6 million of loss incurred on early extinguishment of debt.
Adjusted EBITDA margin contracted 360 basis points (bps) year over year to 17.7%
Segments in Detail
Global Funds Transfer
The segment reported total revenues of $306 million, which declined 0.8% year over year, induced by a 2% dip in Money Transfer revenues. The Money Transfer business of MoneyGram continued to perform well in the quarter, attributable to a 34% surge in revenues of its direct-to-consumer digital business MoneyGram Online (MGO). Digital revenues climbed 28% year over year and attained a record figure of $70 million.
MoneyGram has been investing heavily in the digital platform for a while and so has been another player in the same industry, which is Western Union Co. (WU - Free Report) .
Financial Paper Products
Total revenues declined 6.8% year over year to $13.6 million. While money order revenues of $10 million dipped 4% year over year, official check revenues declined 14.3% year over year to $3.6 million.
Liquidity Position (as of Sep 30, 2021)
Cash and cash equivalents were $117 million, down 40.3% from the level at 2020 end.
The company’s payment service obligation as of Sep 30, 2021 was $3.6 billion. The figure declined 2.6% from the level as of Dec 31, 2020. The company generated adjusted free cash flow of $33.5 million in the third quarter, which increased 32% year over year.
Capital expenditures were $10.2 million, reflecting a decrease of $0.5 million from the third-quarter 2020 level.
Q421 Guidance
Total revenues are estimated to be $325 million on the back of robust digital growth and more than 30% for MGO.
The company estimates adjusted EBITDA to be nearly $60 million. It does not include any benefit from Ripple incentive fees.
Among other players in the finance space, which have reported third-quarter earnings so far, the bottom-line results of American Express Company (AXP - Free Report) and Synchrony Financial (SYF - Free Report) surpassed estimates by 27.53% and 12.08% respectively.
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MoneyGram (MGI) Q3 Earnings Beat Estimates, Revenues Miss
MoneyGram International, Inc. reported third-quarter 2021 adjusted earnings per share of 13 cents, which beat the Zacks Consensus Estimate by 62.5%. Earnings were down 18.8% year over year.
Year over year, earnings declined due to lower revenues and a rise in operating expenses.
MoneyGram International Inc. Price, Consensus and EPS Surprise
MoneyGram International Inc. price-consensus-eps-surprise-chart | MoneyGram International Inc. Quote
Quarterly Operational Update
Revenues of $319.6 million were down 1.1% year over year due to lower fee and other revenues. It also missed the Zacks Consensus Estimate by 3.24%.
Total operating expenses of $122.3 million increased 9% year over year, primarily due to higher transaction and operations support cost.
Interest expense dropped 43.5% year over year to $13 million in the quarter under review.
Adjusted EBITDA of $56.5 million fell 17.9% year over year due to $33.6 million of loss incurred on early extinguishment of debt.
Adjusted EBITDA margin contracted 360 basis points (bps) year over year to 17.7%
Segments in Detail
Global Funds Transfer
The segment reported total revenues of $306 million, which declined 0.8% year over year, induced by a 2% dip in Money Transfer revenues. The Money Transfer business of MoneyGram continued to perform well in the quarter, attributable to a 34% surge in revenues of its direct-to-consumer digital business MoneyGram Online (MGO). Digital revenues climbed 28% year over year and attained a record figure of $70 million.
MoneyGram has been investing heavily in the digital platform for a while and so has been another player in the same industry, which is Western Union Co. (WU - Free Report) .
Financial Paper Products
Total revenues declined 6.8% year over year to $13.6 million. While money order revenues of $10 million dipped 4% year over year, official check revenues declined 14.3% year over year to $3.6 million.
Liquidity Position (as of Sep 30, 2021)
Cash and cash equivalents were $117 million, down 40.3% from the level at 2020 end.
The company’s payment service obligation as of Sep 30, 2021 was $3.6 billion. The figure declined 2.6% from the level as of Dec 31, 2020.
The company generated adjusted free cash flow of $33.5 million in the third quarter, which increased 32% year over year.
Capital expenditures were $10.2 million, reflecting a decrease of $0.5 million from the third-quarter 2020 level.
Q421 Guidance
Total revenues are estimated to be $325 million on the back of robust digital growth and more than 30% for MGO.
The company estimates adjusted EBITDA to be nearly $60 million. It does not include any benefit from Ripple incentive fees.
Zacks Rank
MoneyGram currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Other Finance Sector Releases
Among other players in the finance space, which have reported third-quarter earnings so far, the bottom-line results of American Express Company (AXP - Free Report) and Synchrony Financial (SYF - Free Report) surpassed estimates by 27.53% and 12.08% respectively.