MoneyGram Profits Rise

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MoneyGram International's

(MGI) - Get Report

fourth-quarter profit rose 34.5% from a year ago, topping estimates.

The company earned $29.6 million, or 34 cents a share, in the quarter, compared to $22 million or 25 cents a share, a year ago. Analysts were forecasting 30 cents a share in the latest period.

MoneyGram's revenue was up by 17.2%, to $256.9 million, beating the consensus estimate of $250.44 million.

The company expects to earn $1.25 to $1.30 a share in 2006, in line with analysts' estimates of $1.28.

"The performance in money transfer business drove consistent earnings growth throughout the year and continues to reflect our marketing and advertising efforts around simplified pricing and global brand," it said.

In the fourth quarter, operating profit margin rose 80 basis points to 13.8%.

MoneyGram operates two business segments, Global Funds Transfer and Payment Systems. For the Global Funds Transfer segment, which consists of money transfer and retail money orders, revenue increased nearly 21% to $175.2 million. Money transfer transaction volume grew 39% and money transfer revenue grew 25% to $139.1 million compared to the fourth quarter of 2004. The Payment Systems segment revenue increased 10% to $81.7 million in the fourth quarter compared with $74.0 million a year ago.

During the fourth quarter, MoneyGram bought back 586,000 shares at an average price of $25.77 apiece.

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