Western Union 3Q Profit Sinks Amid Legal Expense

ENGLEWOOD, Colo. (AP) — Cash transfer company Western Union Co. said Tuesday that its third-quarter profit sank 25 percent as it set aside cash in preparation for a legal settlement.

For the three months ending Sept. 30, the company earned $181 million, or 26 cents per share, down from $240.8 million, or 33 cents per share, during the same period last year.

Excluding the impact of a company effort to set aside $71 million before taxes for an anticipated legal settlement, the company earned 33 cents per share in the latest quarter.

Revenue dipped 5 percent to $1.31 billion from $1.38 billion.

Analysts surveyed by Thomson Reuters expected profit of 32 cents per share on revenue of $1.29 billion.

Western Union said the $71 million accrual relates to ongoing legal fighting with the state of Arizona over a decision by authorities there to seize money transfers they say are related to drug smuggling.

Most of those seizures were wire transfers sent to Arizona, but one transfer was from the U.S. to the Mexican state of Sonora. Western Union challenged that seizure, arguing Arizona prosecutors had no power to interfere with transfers into another country.

Western Union expects a settlement by the end of the year.

During the third quarter, Western Union said revenue from consumer-to-consumer wire transfers — the bulk of its business — fell 5 percent. Profit for the division was down 6 percent.

Western Union shares rose 34 cents to $20.02 in morning trading.