Western Union had a mixed first quarter in 2014, reporting both a drop in net profits but an uptick in revenue in 2014. The Colorado-based money transfer service reported first-quarter net income of $203 million, which represents 4 percent from $212 million in the first quarter of 2013. On the upside, the company saw first-quarter revenue of $1.35 billion, at 2 percent increase from $1.32 billion a year earlier.
In other positive news, earnings of 37 cents a share beat analysts surveyed by Thomson Reuters average estimate of 35 cents share.
“In 2014, we continued to focus on 3 key areas: strengthening consumer money transfer with an emphasis on digital expansion, growing Western Union Business Solutions and generating and deploying strong cash flow for our shareholders,” said Hikmet Ersek, Western Union president and CEO on the company’s Q1 earnings call.
We believe our first quarter results are tracking with our plans in these areas, and we look forward to continue to drive the business and report our progress throughout the year.”
The company also reported an uptick of total transaction of about 9 percent. They saw their walk-in cash business decline, as projected, but customers making increased use of Western Union’s online money transfer service balanced that out. Global growth was strong, particularly in Mexico and Western Union Business Solutions, their B2B service, had a strong Q1 growing 7 to 10 percent on a constant currency basis.
“We are pleased with Business Solutions, which delivered a third consecutive quarter of low double-digit constant currency revenue growth. Our focus on sales execution, customer retention and more products and services is leading to good results in the growing B2B market.”
When asked about Walmart’s recent announced entry into their market space with the launch of their Walmart-2-Walmart money transfer service, Ersek seemed mostly unconcerned. He noted that while he is unsure of Walmart plans, he believe that Western Union is large, diverse and established enough not to be threatened by the new player on the block.
“We have 46,000 locations. I don’t know how many Walmart has, about 4,000 locations or something like that. So our 46,000 locations do serve customers. The customers value the speed. The customers value our brand. The customers value our locations.”
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