* Q4 net income $237.9 mln vs $452.3 mln year ago
* FY 2013 earnings per share forecast $1.33 to $1.43
* Consumer-to-consumer revenue falls 2 pct
* Company to reduce fees amid rising competition
Feb 12 Western Union Co, the world's
largest money transfer company, forecast a decline in 2013
earnings as it cuts prices to keep up with nimble competitors
that have eroded its market dominance.
Western Union said it expected to earn between $1.33 and
$1.43 per share in 2013, compared with $1.69 per share in 2012.
The Englewood, Colorado-based company also reported a 47 percent
decline in fourth-quarter earnings.
Smaller rivals such as MoneyGram International Inc
have won market share by charging less for transferring money,
competition that has intensified since the lapse of some of
Western Union's exclusive contracts with financial institutions.
The company said in a statement that it expects to incur
expenses of $45 million this year as it looks for additional
cost savings, which might include job cuts.
Chief Executive Hikmet Ersek has come under fire from
restless investors who have demanded a strong response to the
decline in earnings.
Speaking on a conference call with analysts, Ersek said he
expected lower transaction fees to result in a decline in
revenue this year in Western Union's mainstay business as an
agent for the transfer of money between individuals.
But he forecast that consumer-to-consumer revenue would grow
"in the following years due to anticipated increases in consumer
usage and loyalty".
Western Union said consumer-to-consumer revenue, which
accounts for more than 81 percent of its total revenue, fell
more than 2 percent in the fourth quarter. Total revenue fell
less than 1 percent to $1.42 billion.
Net income in the three months to Dec. 31 fell to $237.9
million, or 40 cents per share, from $452.3 million, or 73 cents
per share, a year earlier. Excluding items, the company earned
42 cents per share.
Analysts on average had expected earnings of 35 cents per
share on revenue of $1.4 billion.
In a recent filing with the U.S. Securities and Exchange
Commission, Western Union said proposed laws in some countries
in Africa, south Asia and eastern Europe would prevent exclusive
deals with agents.
This could increase competition in India and Russia, where
the company's premium prices can sometimes be 50 percent to 60
percent higher than those of its competitors.
In Mexico, Western Union's near-20-year exclusive
relationship with Mexican financial services group Grupo Elektra
ended last February and the company's transactions
in the country have declined while MoneyGram's have grown.
Western Union's shares were down 3 percent after the bell.
They closed at $14.34 on the New York Stock Exchange on Tuesday.