UPDATE 3-Western Union raises forecast as remittances rise
* Q2 adj EPS $0.42 vs est $0.38
* Q2 rev up 7 pct to $1.37 bln
* Sees FY adj EPS $1.53-$1.58
* Shares rise 4 pct (Adds conference call details, updates share movement)
By Brenton Cordeiro
BANGALORE, July 26 (Reuters) - Western Union Co boosted its profit forecast for the year as more people remitted money and its investments into diversifying into other payment channels began to pay off.
The world's largest payment transfer company, which was hit during the credit crunch as remittances declined, has been seeing a turnaround as the U.S. recovers from the financial crisis and even raised its dividend twice in the last year.
"The consumer-to-consumer business is growing in each of our regions, and our bill payments revenue growth turned positive in the quarter for the first time since 2008," Chief Executive Hikmet Ersek said on a post-earnings call.
Revenue at Western Union's core consumer-to-consumer (C2C) segment rose 8 percent -- its highest level in almost two years -- on a transaction growth of 6 percent.
Ersek said Western Union was gaining market share not only in its core money transfer business, but was entering new customer segments with electronic channels and business-to-business activities.
The company, which has also been focussing on building its electronic channels business that includes westernunion.com and mobile payments, said revenue in that segment climbed 35 percent, and that it had 1.1 million prepaid cards in force at the end of the second quarter.
Earlier this month, Western Union said it would buy Travelex's global business payments division in a deal valued at nearly $1 billion to enhance its international business payments services.
Western Union expects to earn $1.53-$1.58 a share for the full year, excluding restructuring charges. Analysts expect full-year earnings of $1.51 a share. The company had previously forecast a profit of $1.47 to $1.52 a share.
For the second quarter, the company posted net income of $263.2 million, or 41 cents a share, up from $221 million, or 33 cents, a year ago.
Englewood, Colorado-based Western Union earned 42 cents a share, excluding items, during the quarter.
Western Union, which competes with MoneyGram International , said revenue grew 7 percent to $1.37 billion in the quarter.
Analysts were looking for a profit of 38 cents a share, before items, on revenue of $1.33 billion.
Shares of the company were up 4 percent at $20.01 in early trading Tuesday on the New York Stock Exchange.
For all the alerts, please double-click (Reporting by Brenton Cordeiro and Jochelle Mendonca; Editing by Saumyadeb Chakrabarty and Gopakumar Warrier)
- WTO overcomes last minute hitch to reach its first global trade deal
- Colorado baker discriminated by denying gay couple wedding cake: judge
- Flights delayed as air pollution hits record in Shanghai
- Amish girl in Ohio will not be forced to resume chemo for cancer
- South Africa mourns Mandela, will bury him on December 15 |