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What's in the Cards for Western Union's (WU) Q1 Earnings?

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The Western Union Company (WU - Free Report) is set to report first-quarter 2022 earnings on Apr 28, after the market closes.

Q1 Earnings and Revenue Estimates

The Zacks Consensus Estimate for WU’s first-quarter earnings per share is pegged at 44 cents, in line with the year-ago period’s reported figure. The consensus mark for the same-period revenues stands at $1.15 billion, suggesting a 4.8% dip from the year-earlier quarter’s reported number.

Let’s see how things have shaped up prior to the first-quarter earnings 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 are likely to have provided a cushion to its first-quarter results.
Per its last earnings call, management had expected recent macro trends to continue generating revenues in the consumer business in the first  quarter of 2022, consistent with the last year’s exit rate. Management expected GAAP revenues from Business Solutions for the first quarter of 2022 to be $75 million. The consensus mark for revenues from the same segment indicates a downfall of 22.7% from the year-ago quarter’s reported number.

Nevertheless, digital partnerships are likely to have driven the metric to some extent.

Western Union’ s largest segment Consumer to consumer (C2C) is likely to have suffered lower transactions. The consensus mark for revenues from C2C business line indicates a slip of 0.7% from the year-ago quarter’s actuals.

WU’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

Western Union’s bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in one), the average beat being 7.32%. 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.

Highlights of Q4 Earnings

In the last reported quarter, WU came up with fourth-quarter 2021 earnings per share of 64 cents, beating the Zacks Consensus Estimate of 53 cents by 20.8%. The bottom line grew 42.2% year over year. Results were driven by a non-cash charge from the termination of its pension plan.

Western Union witnessed improvement in digital business that registered double-digit growth in the fourth quarter.

Total revenues of $1.3 billion inched up 1% year over year but missed the Zacks Consensus Estimate by 1%. Top-line improvement was led by the digital money transfer and the Business Solutions segment, partially offset by the retail money transfer decline.

Stocks to Consider

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

Aflac Incorporated (AFL - Free Report) currently has an Earnings ESP of +1.76% and Zacks Rank of 3. AFL managed to deliver a trailing four-quarter earnings surprise of 18.20%, on average. AFL will report Q1 results on Apr 27.

Arthur J. Gallagher & Co. (AJG - Free Report) has an Earnings ESP of +0.76% and a Zacks Rank of 1 at present. AJG will report first-quarter earnings on Apr 28. AJG’s earnings managed to surpass estimates in all its trailing four quarters, the average being 8.76%.

The Allstate Corporation (ALL - Free Report) will report first-quarter 2022 earnings results on May 4. ALL has an Earnings ESP of +4.77% and a Zacks Rank #3, currently. ALL’s bottom line managed to beat estimates in three of its trailing four quarters (missing the mark in one), the average surprise being 7.72%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
 

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