We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Western Union (WU) Misses on Q1 Earnings, Reaffirms Guidance
Read MoreHide Full Article
The Western Union Company (WU - Free Report) reported first-quarter 2017 operating earnings per share of 35 cents, which missed the Zacks Consensus Estimate by 12.5%. In the year-ago quarter, the company had reported earnings of 37 cents per share.
The company’s bottom line suffered from the tax impact of changes in the internal ownership structure of some of its international subsidiaries.
Behind The Headlines
Total revenue of $1.3 billion remained unchanged on a year-over-year basis but was up 3% on a constant currency basis.
Western Union’s total expense increased 2% year over year to $1.06 billion.
Adjusted operating margin was 19.5%, down 40 basis points year over year. The decline was primarily due to the negative impact of foreign exchange and unfavorable customer and funding mix in the company’s consumer to business segment, partially offset by the timing of marketing expenditure.
The company continues to expand its digital initiatives and have online transaction sites in 40 countries, including the European Union, and mobile apps in 18 markets, allowing consumers to send money to over 200 countries and territories.
Segment Update
Revenues for the Consumer-to-Consumer (C2C) segment, which contributes nearly 75% to the company’s top line, remained unchanged on a year-over-year basis, but was up 2% on a constant currency basis to $1.02 billion. Total transactions grew 2%, driven by strength at westernunion.com. Revenues from westernunion.com C2C increased 26%, or 28% on a constant currency basis, on transaction growth of 27%. Notably, westernunion.com represented 9% of total C2C revenue in the quarter.
Operating income declined 2% year over year to $227.6 million. Operating margin declined 30 basis points due to the negative impact of foreign exchange, partly offset by benefits from timing of marketing expenditure.
In the Consumer-to-Business segment, revenue was up 8% or 10% on a constant currency basis year over year to $168.2 million. Operating income was $20.5 million, down 10% year over year. Operating margin declined 240 basis points due to the negative impact of customer and funding mix.
Business Solutions revenues decreased 6% or 3% on a constant currency basis year over year to $93.6 million. The segment reported operating income of $2.3 million in the quarter, down 2% year over year.
Financial Update
Cash and cash equivalents as of Mar 31, 2017 were $1.32 billion, up from $0.9 billion at 2016 end.
As of Mar 31, 2017, stockholders' equity was $750 million, down from $902 million at year-end 2016.
Share Repurchase and Dividend Update
In the reported quarter, the company returned $308 million to its shareholders in the quarter through share repurchases and dividends.
Western Union Company (The) Price, Consensus and EPS Surprise
Western Union affirmed its outlook for 2017. It expects growth of flat to low single digit decrease in GAAP revenues, or a low single-digit increase on a constant currency basis. The company projects GAAP operating margin of approximately 18% and adjusted operating margin of approximately 20%, GAAP EPS in a range of $1.48 to $1.60 and adjusted EPS in a range of $1.63 to $1.75. Adjusted EPS excludes the impact of the WU Way related expenses, and GAAP operating cash flow of approximately $200 million.
Among other companies in the same space Total System Services, Inc. , Fiserv, Inc. and Vantiv, Inc. beat first-quarter earnings estimates by 8.22%, 5.93 and 3.28%, respectively.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Western Union (WU) Misses on Q1 Earnings, Reaffirms Guidance
The Western Union Company (WU - Free Report) reported first-quarter 2017 operating earnings per share of 35 cents, which missed the Zacks Consensus Estimate by 12.5%. In the year-ago quarter, the company had reported earnings of 37 cents per share.
The company’s bottom line suffered from the tax impact of changes in the internal ownership structure of some of its international subsidiaries.
Behind The Headlines
Total revenue of $1.3 billion remained unchanged on a year-over-year basis but was up 3% on a constant currency basis.
Western Union’s total expense increased 2% year over year to $1.06 billion.
Adjusted operating margin was 19.5%, down 40 basis points year over year. The decline was primarily due to the negative impact of foreign exchange and unfavorable customer and funding mix in the company’s consumer to business segment, partially offset by the timing of marketing expenditure.
The company continues to expand its digital initiatives and have online transaction sites in 40 countries, including the European Union, and mobile apps in 18 markets, allowing consumers to send money to over 200 countries and territories.
Segment Update
Revenues for the Consumer-to-Consumer (C2C) segment, which contributes nearly 75% to the company’s top line, remained unchanged on a year-over-year basis, but was up 2% on a constant currency basis to $1.02 billion. Total transactions grew 2%, driven by strength at westernunion.com. Revenues from westernunion.com C2C increased 26%, or 28% on a constant currency basis, on transaction growth of 27%. Notably, westernunion.com represented 9% of total C2C revenue in the quarter.
Operating income declined 2% year over year to $227.6 million. Operating margin declined 30 basis points due to the negative impact of foreign exchange, partly offset by benefits from timing of marketing expenditure.
In the Consumer-to-Business segment, revenue was up 8% or 10% on a constant currency basis year over year to $168.2 million. Operating income was $20.5 million, down 10% year over year. Operating margin declined 240 basis points due to the negative impact of customer and funding mix.
Business Solutions revenues decreased 6% or 3% on a constant currency basis year over year to $93.6 million. The segment reported operating income of $2.3 million in the quarter, down 2% year over year.
Financial Update
Cash and cash equivalents as of Mar 31, 2017 were $1.32 billion, up from $0.9 billion at 2016 end.
As of Mar 31, 2017, stockholders' equity was $750 million, down from $902 million at year-end 2016.
Share Repurchase and Dividend Update
In the reported quarter, the company returned $308 million to its shareholders in the quarter through share repurchases and dividends.
Western Union Company (The) Price, Consensus and EPS Surprise
Western Union Company (The) Price, Consensus and EPS Surprise | Western Union Company (The) Quote
2017 Guidance Intact
Western Union affirmed its outlook for 2017. It expects growth of flat to low single digit decrease in GAAP revenues, or a low single-digit increase on a constant currency basis. The company projects GAAP operating margin of approximately 18% and adjusted operating margin of approximately 20%, GAAP EPS in a range of $1.48 to $1.60 and adjusted EPS in a range of $1.63 to $1.75. Adjusted EPS excludes the impact of the WU Way related expenses, and GAAP operating cash flow of approximately $200 million.
Zacks Rank
Western Union currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Stocks
Among other companies in the same space Total System Services, Inc. , Fiserv, Inc. and Vantiv, Inc. beat first-quarter earnings estimates by 8.22%, 5.93 and 3.28%, respectively.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>