Revenue of $1.3 Billion. EPS of $0.33, or $0.36 Excluding Restructuring Charges.Company Raises EPS Outlook. Also ties up with Bandhan Financial Services, a microfinance company in India with over 800 locations across the country,
The Western Union Company is a financial services and communications company based in the United States. Until it discontinued the service, Western Union was the best known US company in the business of exchanging telegrams.
Western Union has a number of divisions, with products such as person-to-person money transfer, money orders, and commercial services. As of mid 2010, the company had more than 410,000 Western Union agent locations in over 240 countries and territories. Reported revenues topped USD$5 billion annually.
Financial highlights for the quarter are given below:
— Revenue of $1.3 billion, an increase of 2% compared to last year’s second quarter
— Constant currency adjusted revenue increase of 3%
— Restructuring expenses of $35 million, or $22 million after-tax, related to organizational changes and other actions described in the Company’s May 27, 2010 press release
— Operating income margin of 24% (GAAP), or 27% excluding restructuring expenses, compared to 27% in last year’s second quarter
— EPS of $0.33 (GAAP), or $0.36 excluding restructuring expenses
— EPS of $0.37 on a constant currency basis, excluding restructuring expenses
— Year-to-date cash provided by operating activities of $326 million, including a $250 million reduction due to a first quarter refundable tax deposit
Operational highlights for the quarter included:
— Grew global consumer-to-consumer (C2C) transactions by 9%, led by accelerating trends in the Americas region
— The European Union delivered overall transaction growth despite economic challenges in certain countries
— Transactions in the Gulf States declined modestly
— Realized further progress in the U.S. domestic money transfer business, with 28% domestic transaction growth in the quarter
— Initiated organizational changes to improve efficiency and drive long-term growth
— Further advanced strategic initiatives in electronic channels, including increased distribution of prepaid cards to over 500,000 cards-in-force
— Signed agreement with Family Dollar to offer the Western Union(R) goCASHa” prepaid in-lane money transfer service at more than 6,500 stores in the U.S.
— Received authorization to offer global money transfer services in Japan and launched with Travelex in July
— Added to European retail location opportunity through an agreement with OMV to offer money transfer services at more than 1,800 gas stations across eight European Union countries
— Expanded banking distribution in the Philippines by entering an alliance with the Philippine National Bank, which has the country’s largest offshore bank network. Other key agent additions included Bandhan Financial Services, a major microfinance services company in India with over 800 locations across the country, and Yapi Kredi, one of the largest banks in Turkey with over 800 locations.
— Grew agent locations to approximately 430,000
— Completed $217 million in share repurchases and paid $40 million in quarterly dividends
Western Union President and Chief Executive Officer Christina A. Gold said, “The increased momentum we experienced in the first quarter has continued into the second, as each of our regions contributed to solid transaction growth. As I enter my last few weeks with Western Union I believe the foundation is solid, with a strong brand, an unmatched global network, and an energized management team. We are confident the strategies of profitable growth in money transfer, rapid development of electronic channels, and expansion of business payments are the right ones to achieve success.”
Chief Operating Officer and CEO-Elect Hikmet Ersek added, “The second quarter results demonstrate the benefits of our diversified geographic portfolio. Although the global economy remains challenging in many parts of the world, our overall business continues to improve. Transaction trends increased, and we delivered solid margins. As a result of our first half performance, we are raising our earnings per share outlook for the year, excluding restructuring charges.”
Ersek added, “We plan to build on our momentum by leveraging our many competitive advantages to enhance our speed and execution, add new services and channels, and improve our productivity. The organizational changes we initiated in the quarter are one step towards improving our efficiencies and driving growth over the long-term.”
As previously announced, Ersek will become CEO upon Gold’s retirement on September 1, 2010.