Western Union Earnings: Profit CLIMBS for Third Straight Quarter

S&P 500 (NYSE:SPY) component The Western Union Company (NYSE:WU) reported higher profit for the second quarter as revenue showed growth. Western Union is engaged in global money transfer and payment services.

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The Western Union Company Earnings Cheat Sheet

Results: Net income for the construction services rose to $271.2 million (44 cents per share) vs. $263.2 million (41 cents per share) in the same quarter a year earlier. This marks a rise of 3% from the year-earlier quarter.

Revenue: Fell 100% to $1.4251 from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Western Union Company beat the mean analyst estimate of 43 cents per share. It fell short of the average revenue estimate of $1.45 billion.

Quoting Management: Western Union President and Chief Executive Officer Hikmet Ersek commented, “Overall we are on track for our full year financial outlook. In the quarter, our core consumer money transfer business, which represents over 80% of Company revenue, delivered solid 3% constant currency growth with consistent margins. The Middle East and Africa, Asia Pacific, and Latin America regions and on-line money transfer performed well, more than offsetting the impact of consumer slowdowns in Southern Europe and some expected softness in certain countries. The global diversification of our portfolio and resiliency of our consumers continue to drive revenue growth and strong cash flow, even in a challenging economic environment.” Ersek continued, “We continue to invest for the future to support our strategic growth areas of Global Consumer Financial Services, Business Solutions, and Ventures. We are further expanding our consumer network, and now have 510,000 agent locations across the world. Business Solutions global expansion is on track and new customer acquisition is strong. In Ventures, our westernunion.com on-line money transfer service continues to deliver strong growth while we develop new capabilities, and our prepaid business will soon benefit from a significant increase in distribution points in the U.S.” Ersek added, “The long-term opportunities are strong, and we believe in our growth strategies for the future. Our business continues to generate significant free cash flow, and we have returned over $430 million to shareholders through the combination of share repurchase and dividends in the first half of the year. We remain committed to strong cash deployment for our shareholders.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 17.6% and in the fourth quarter of the last fiscal year, the figure rose 86.4%.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the first quarter, which saw revenue rise 39.6%.

The company beat estimates last quarter after being in line with expectations in the first quarter with net income of 40 cents per share.

Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the third quarter is 45 cents per share, dropping from 46 cents a month ago. For the fiscal year, the average estimate has been unchanged at $1.74 a share.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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