Earnings

Western Union: Dotcom Revenues Up 22 Percent Year Over Year

Investors may have been focused on slight misses on the top and bottom lines for Western Union, but a drill-down into the numbers shows continued gains amid digital efforts.

As reported Thursday, revenues of $1.4 billion were up 2.2 percent year on year, missing estimates by $20 million.  The reported earnings of 46 cents per share was off by one penny when measured against consensus.

Overall consumer to consumer revenues, the company said, which stood at 80 percent of the top line in the quarter, were up four percent, amid transaction growth of five percent.

The company noted, too, that geographic activity was led by money sent from origination points that came from Latin America, Europe and North America.

But it was in westernunion.com where consumer to consumer revenues shone, up 22 percent, or 21 percent as measured in constant currency.  The transaction count was up 26 percent year on year. Western Union said that westernunion.com revenues were 11 percent of total consumer to consumer sales in the quarter.

The company also said that its business solutions sales were down four percent as reported, year over year, and stood, as noted in the earnings release, at seven percent of the top line in the quarter.

In the conference call with analysts, Hikmet Ersek, CEO, called out recent initiatives, including the recent signing of an agreement with Albertsons, with total presence in 2,300 locations of that grocer.  He noted, too, that westernunion.com is available in 45 countries.

“We are working on expanding our co-branded digital offerings, such as with our bank agents, where we offer our money transfer to their online banking services and their ATMs,” he said.  Digital offerings other than westerunion.com are another two percent of the company’s C2C revenues, he said.

CFO Rajesh Agrawal said that cross border activity gained nine percent year on year.  Drilling down a bit into regional results, he said that North America was up three percent, with transactions up two percent. U.S. to Mexico activity was up sequentially.  Revenues in Latin America and Caribbean regions were up 11 percent, or 20 percent in constant currency, while transactions gained 16 percent.

In reference to questions about Zelle and Venmo, Ersek stated that most of his firm’s business comes from cross-currency money transfer business, which he stated is a different business model, and one that he noted is “our specialty.  We have it in 20,000 corridors.”  Domestic money transfer is a relatively smaller part of the firm’s business, he said, at about seven percent of revenues.

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