UPDATE 2-Western Union 1st-quarter profit rises 7 percent

(Adds outlook, new services, byline)

By Karey Wutkowski

WASHINGTON, April 22 (Reuters) - Western Union Co (WU.N), the world's largest payment transfer company, reported a 7 percent rise in quarterly earnings Tuesday on strong international consumer-to-consumer business.

First-quarter net income was $207 million, or 27 cents a share, up from $193.2 million, or 25 cents a share, a year earlier.

Excluding restructuring charges, the company earned 29 cents a share. On that basis, analysts' average forecast was 28 cents a share, according to Reuters Estimates.

Revenue increased 12 percent to $1.3 billion. Currency translation gains accounted for $33 million of the increase.

"The overall trajectory of our business, particularly that of our international (consumer-to-consumer) business, gives us the confidence that we will deliver on our 2008 financial objectives," Chief Executive Christina Gold said in a statement.

The Englewood, Colorado-based company raised its 2008 earnings forecast by 1 cent, to a range of $1.25 to $1.29 per share, excluding 6 cents of restructuring expenses. It said it expects revenue growth of 9 percent to 11 percent.

It said it aims for up to 0.5 percentage point of margin improvement in 2009.

Consumer-to-consumer revenue grew 14 percent in the first quarter, driven by strong growth in India and China, the company said.

Consumer-to-business revenue also grew, by 4 percent, driven by strong demand for electronic bill payment services in the United States and the company's Pago Facil business in Argentina.

Western Union said it is learning more from its testing of mobile money transfers in the United States and is seeing a "tremendous demand" from mobile carriers to offer the service.

Gold said on a conference call that mobile money transfer customers tend to send money in smaller amounts, usually around $50, but the high volume of the business will make it profitable.

"It's a question of learning and working with the carriers to make this work for our business," she said.

Western Union said it was also developing its micro lending efforts, launching a pilot program in Hong Kong in the first quarter. It said the results of that program indicate Western Union customers will choose the company for additional financial services. (Reporting by Karey Wutkowski; Editing by Steve Orlofsky and John Wallace)