Western Union profit falls as expenses rise; shares down 13 percent
(Reuters) - Western Union Co (WU.N), the world's largest money-transfer company, reported a 20 percent fall in quarterly profit in the face of increasing competition and higher regulatory expenses, sending its shares down 13 percent after the bell.
The company warned of a flat 2014, as it faces new money laundering and fraud prevention measures in countries such as Spain and Britain. The company also expanded its settlement agreement with State of Arizona, it said in a filing.
"Due to the compliance expenses as well as a potential impact from new compliance procedures we do not expect growth in operating profit in 2014 at this time," Chief Executive Hikmet Ersek said on a conference call to investors.
Western Union has cut prices and invested heavily in its online and mobile business to compete with MoneyGram International Inc (MGI.O), Xoom Corp (XOOM.O) and Boom Financial Inc.
Western Union raised the low end of its 2013 earnings forecast to $1.38 from $1.33 per share. The top end of the range was unchanged.
Analysts on average had expected earnings of 35 cents per share, according to Thomson Reuters I/B/E/S.
Western Union's transaction volumes rose 9 percent to 62.45 million in the third quarter from a year earlier, while remittances totaled $21.1 billion, up from $19.7 billion.
The company's online money transfer business, Westernunion.com, reported transaction growth of 68 percent.
Net income fell to $214.4 million, or 39 cents per share, in the quarter ended September 30. Expenses rose 5 percent to $1.11 billion.
Revenue slipped 1 percent to $1.41 billion.
Shares of the company were at $16.69 in extended trading after closing at $19.24 on the New York Stock Exchange on Tuesday.
(Reporting By Neha Dimri in Bangalore; Editing by Don Sebastian, Maju Samuel)
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