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MoneyGram (MGI) Misses Q1 Earnings and Revenue Estimates

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MoneyGram International Inc. (MGI - Free Report) posted first-quarter loss of 6 cents per share, missing the Zacks Consensus Estimate by 175%. In the year-ago quarter, the company reported earnings of 15 cents per share.

MoneyGram’s total revenue for the reported quarter was $315 million, declined 17% year over year (or 15% on constant currency) and missed the Zacks Consensus estimate by 4%.

Among the components of revenues, fees and other revenues decreased 69% to $301 million, while investment revenues increased 4.5% to $14.4 million.

Adjusted EBITDA of $50.1 million declined 25% year over year.

Adjusted EBITDA margin of 15.9% declined 160 basis points year over year.

Total operating expenses declined by 18% year over year to $306.8 million.

MoneyGram International Inc. Price, Consensus and EPS Surprise

Segment Details

In the Global Funds Transfer segment, money transfer revenues decreased 19% year over year to $273.3 million. Bill payment revenues were also down by 24% year over year to $15.9 million.

Total digital solutions, which include MoneyGram.com, represented 16% of total money transfer revenue.

The Financial Paper Products segment reported total revenue of $26.2 million, grew 16% year over year due to a 3.7% uptick in money order revenues and 34% increase in official check revenues. Adjusted operating margin improved 650 basis points from the year-ago quarter to 31.3%.

Liquidity

As of Mar 31, 2019, MoneyGram had cash and cash equivalents of $129.9 million, down 10.7% from year end 2018 levels. The company’s total assets were $4.4 billion, up 1.6% from year end 2018 levels. The company exited the first quarter with $899 million of outstanding debt, almost unchanged from year end 2018 levels.

Adjusted Free Cash Flow for the quarter was $13.3 million, down 55% year over year.

Guidance Affirmed    

The company reiterated its earlier issued guidance which calls for revenue to decline 2% to 4% on a constant-currency basis. Adjusted EBITDA is expected to decline approximately 8% to 12% on a constant-currency basis.

2019 Guidance

For full-year 2019, the company is projecting revenues to decline approximately 2% to 4% and adjusted EBITDA is expected to decline approximately 8% to 12%, both on a constant-currency basis.

Zacks Rank and Other Stocks

Currently, MoneyGram holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are FleetCor Technologies, Inc. (FLT - Free Report) , Worldpay, Inc. (WP - Free Report) and Green Dot Corp. (GDOT - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy) and have average four-quarter positive surprise of 1.71%, 5.2% and 17.4%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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