Will Western Union (WU) Stock Disappoint Post Q3 Earnings?
Zacks Investment Research | Oct 30, 2016 10:50PM ET
Western Union Co. (NYSE:WU) is set to report third-quarter 2016 earnings results after market close on Nov 1.
Last quarter, this money transfer company surpassed the earnings estimate by 5%. The company, however, beat estimates in three out of the past four reported quarters by an average 1.8%.
Will Western Union be able to post a positive earnings surprise this quarter? Let's see what factors might have influenced the earnings report this time around.
Factors Likely to Influence Q3 Results
We expect third-quarter earnings to witness growth in the consumer money transfer business driven by strong performance from westernunion.com – a line of business in which the company has been consistently investing over the past many years.
Revenues from its international operations will likely present a mixed picture, with growth in some key European countries but continued challenges in many oil industry dependent markets.
The bottom line will however, see a drag from technology spending and investment that has increased compared to last year. The company continues to invest in enhancements to its platforms, digital capabilities, settlement systems, and data center transformation.
Also, a negative currency will act as a dampener.
A number of agreements, deals and partnerships reached with numerous banks, post offices, telecom operators and retail stores recently widened the company’s network. This should drive top-line growth.
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