Western Union 2nd qtr profit rises; stock up
ENGLEWOOD, Colo. (AP) — Western Union reported a 3 percent increase in second-quarter earnings Tuesday, topping Wall Street's expectations thanks to rising transaction fee revenue.
Widely used to wire money to their families in other countries, Western Union's results were stung in the quarter by the strength in the dollar.
The dollar's value has grown against many currencies this year because of an economic downturn from ranging from Europe to Asia. Western Union has a network of 510,000 locations in 200 countries.
The company reported net income of 271.2, or 44 cents per share, for the three months ended June 30. That was up from $263.2 million, or 41 cents per share in the year-ago period.
Analysts surveyed by FactSet had forecast earnings of 43 cents per share, on average.
In early trading, shares of Western Union added 43 cents, or 2.5 percent, to $17.38.
Revenue rose 4 percent to nearly $1.42 billion, slightly short of analysts' estimate of $1.44 billion.
The biggest source of revenue, transaction fees, remained flat at $1.06 billion, while foreign exchange revenue increased 20 percent, to $334.6 million. Other revenue increased 3 percent to $31.1 million.
Expenses rose 6 percent to nearly $1.08 billion.
Consumer-to-consumer transactions, which account for 81 percent of the company's revenue, remained flat.
Revenue from Europe fell 8 percent, while the Middle East and Africa grew 3 percent and the Asia Pacific region grew 4 percent.
Revenue from Latin American and the Caribbean region grew by 5 percent.
Western Union's results were hurt because revenue from other countries when converted to dollars amounted to less. In the quarter, the currency fluctuations hurt revenue from Europe by 5 percent and from Latin America and the Caribbean by 2 percent.
Western Union Co. CEO Hikmet Ersek said that the company is on track to meet its financial outlook for the year.
"The Middle East and Africa, Asia Pacific, and Latin America regions and online money transfer performed well, more than offsetting the impact of consumer slowdowns in Southern Europe," said Ersek.
