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) to Post Q2 Earnings: What's in the Cards?
Read MoreHide Full Article
Western Union Co. (WU - Free Report) is set to release second-quarter 2019 results on Aug 1.
The Zacks Consensus Estimate for earnings per share is pegged at 48 cents, indicating a 4.4% increase from the year-ago figure. Revenues are expected to be $1.34 billion, implying a decline of 5.1% from the year-ago reported figure.
Factors to Affect Q2 Results
The company’s Consumer-to-Consumer business (generates nearly 80% of the total revenues) has been witnessing sliggish revenue growth over the past many quarters. The business faces competition from many fintech players that have the ability to provide lower-cost services. Moreover, pricing action taken in some markets have also brought revenues under pressure.
In the same business segment, earnings are likely to benefit from its electronic platform, westernunion.com, as the company continues in its efforts toward driving digital expansion, offering its cross-border platform to new payment areas and generating additional operating efficiencies. This growth, however, to some extent will be offset by expected declines in U.S. domestic money transfer business.
The company is likely to gain from its WU Way initiative, which is aimed at streamlining its operations and save costs. Under this initiative, in 2018, Western Union achieved approximately $70 million in run-rate savings.
During the to-be-reported quarter, Western Union completed the sale of its Speedpay U.S. domestic bill pay business to ACI Worldwide for approximately $750 million in cash. It also completed the sale of Walletron, a provider of mobile bill presentment solutions, to ACI Worldwide for undisclosed terms. In May, Western Union also completed the sale of its Paymap mortgage payments services.
The company possibly used the funds generated from the above business sale for share buybacks, which should drive its bottom line, and to reduce debt. Its total debt is $6.9 billion compared with its stockholders deficit of $374.2 million.
Earnings in the to-be-reported quarter are likely to suffer from dilution from loss of income related to Speedpay, partly offset by share repurchases and lower net interest expenses.
Total expenses are expected to increase due to divestiture related expenses, which might weigh on operating margin.
Earnings Surprise History
The company missed estimates in two of the trailing four quarters, with an average negative surprise of 0.24%. This is depicted in the chart below:
Our proven model does not conclusively show that Western Union is likely to beat on earnings this reporting cycle. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
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: Though Western Union carries a Zacks Rank of 3, which increases the predictive power of ESP, its 0.00% Earnings ESP makes surprise prediction difficult.
Stocks That Warrant a Look
Here are some companies from the financial services that you may want to consider as these have the right combination of elements to beat on earnings this time around:
Green Dot Corp. (GDOT - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3.
Fiserv, Inc. has an Earnings ESP of +2.17% and a Zacks Rank of 3.
LendingClub Corp. (LC - Free Report) has an Earnings ESP of +0.51% and a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
Western Union (WU) to Post Q2 Earnings: What's in the Cards?
Western Union Co. (WU - Free Report) is set to release second-quarter 2019 results on Aug 1.
The Zacks Consensus Estimate for earnings per share is pegged at 48 cents, indicating a 4.4% increase from the year-ago figure. Revenues are expected to be $1.34 billion, implying a decline of 5.1% from the year-ago reported figure.
Factors to Affect Q2 Results
The company’s Consumer-to-Consumer business (generates nearly 80% of the total revenues) has been witnessing sliggish revenue growth over the past many quarters. The business faces competition from many fintech players that have the ability to provide lower-cost services. Moreover, pricing action taken in some markets have also brought revenues under pressure.
In the same business segment, earnings are likely to benefit from its electronic platform, westernunion.com, as the company continues in its efforts toward driving digital expansion, offering its cross-border platform to new payment areas and generating additional operating efficiencies. This growth, however, to some extent will be offset by expected declines in U.S. domestic money transfer business.
The company is likely to gain from its WU Way initiative, which is aimed at streamlining its operations and save costs. Under this initiative, in 2018, Western Union achieved approximately $70 million in run-rate savings.
During the to-be-reported quarter, Western Union completed the sale of its Speedpay U.S. domestic bill pay business to ACI Worldwide for approximately $750 million in cash. It also completed the sale of Walletron, a provider of mobile bill presentment solutions, to ACI Worldwide for undisclosed terms. In May, Western Union also completed the sale of its Paymap mortgage payments services.
The company possibly used the funds generated from the above business sale for share buybacks, which should drive its bottom line, and to reduce debt. Its total debt is $6.9 billion compared with its stockholders deficit of $374.2 million.
Earnings in the to-be-reported quarter are likely to suffer from dilution from loss of income related to Speedpay, partly offset by share repurchases and lower net interest expenses.
Total expenses are expected to increase due to divestiture related expenses, which might weigh on operating margin.
Earnings Surprise History
The company missed estimates in two of the trailing four quarters, with an average negative surprise of 0.24%. This is depicted in the chart below:
The Western Union Company Price and EPS Surprise
The Western Union Company price-eps-surprise | The Western Union Company Quote
What Our Model Says
Our proven model does not conclusively show that Western Union is likely to beat on earnings this reporting cycle. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
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: Though Western Union carries a Zacks Rank of 3, which increases the predictive power of ESP, its 0.00% Earnings ESP makes surprise prediction difficult.
Stocks That Warrant a Look
Here are some companies from the financial services that you may want to consider as these have the right combination of elements to beat on earnings this time around:
Green Dot Corp. (GDOT - Free Report) has an Earnings ESP of +0.89% and a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Fiserv, Inc. has an Earnings ESP of +2.17% and a Zacks Rank of 3.
LendingClub Corp. (LC - Free Report) has an Earnings ESP of +0.51% and a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>