Western Union Reports Third Quarter Results

The Western Union Company (NYSE: WU) today reported financial results for the 2012 third quarter.

Financial highlights for the quarter included:
  • Revenue of $1.4 billion, a reported increase of 1%, or 3% constant currency, compared to last year’s third quarter
  • Pro forma revenue decrease of 1% constant currency, including Travelex Global Business Payments (TGBP) in the prior year period
  • Operating margin of 25.7% in the current and prior year period. Operating margin was 26.4% excluding TGBP integration expenses of $10 million, compared to 26.7% excluding $14 million of restructuring expenses in the prior year period
  • EBITDA margin excluding TGBP integration expenses of 30.7%, compared to 30.0% excluding restructuring expenses in the prior year period
  • Effective tax rate of 16.8%, compared to 23.6% in the prior year
  • EPS of $0.45, compared to $0.38 in the prior year. EPS excluding TGBP integration expense of $0.46, compared to $0.40 in the prior year excluding restructuring expenses
  • Year-to-date cash provided by operating activities of $860 million, including the impact of tax payments of approximately $90 million relating to the agreement with the U.S. Internal Revenue Service announced December 15, 2011

Western Union President and Chief Executive Officer Hikmet Ersek commented, “In the third quarter our revenues increased 1%. Business was challenging, as soft global economic conditions, compliance related changes, and competitive pressures in certain money transfer corridors impacted revenues. Globally, Western Union branded consumer money transfer revenue grew slightly in constant currency terms, with our on-line business once again delivering very good results. We continue to generate strong cash flow, and year-to-date we have now returned over $600 million to shareholders through share repurchase and dividends.”

Ersek continued, “We are continuing to advance our growth strategies: expanding our network in consumer money transfer; adding on-line and other digital capabilities to attract new consumers; acquiring business customers and expanding geographies in our business-to-business segment; and establishing a global presence in stored value. As we have progressed through 2012, however, the market environment in consumer money transfer has become more difficult, especially in recent months. To better position us for the sustainable growth of this business we are implementing a series of strategic actions, with a focus on enhancing our value proposition, continuing to invest in the fast growing digital channels, and further optimizing our cost structure.”

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