Western Union beats on profit, to buy back $1.2 billion shares

Reuters

Published Feb 10, 2015 05:07PM ET

Western Union beats on profit, to buy back $1.2 billion shares

(Reuters) - Western Union, the world's largest money-transfer company, reported a better-than-expected quarterly profit, helped by cost cuts and a lower tax bill, and it said it would buy back up to $1.2 billion of shares.

Western Union, which gets most of its business from migrant workers sending money home, also forecast 2015 profit above analysts' estimates.

The company raised its quarterly dividend to 15.5 cents from 12.5 cents.

Western Union's shares rose about 3 percent in extended trading.

Revenue at Western Union's digital business, including westernunion.com and mobile money transfer, rose 17 percent in the fourth quarter ended Dec. 31. The business accounted for 6 percent of its total revenue.

The company has ramped up its digital money transfer business to compete with nimble online rivals such as privately owned Boom Financial Inc and Xoom Corp (O:XOOM).

Western Union said in January that it would enable customers to transfer money and pay bills using Apple Inc's (O:AAPL) mobile wallet, Apple Pay.

Revenue from consumer remittances, which account for about 80 percent of Western Union's total revenue, fell 2 percent in the fourth quarter.

The company forecast earnings of $1.58-$1.65 per share for 2015. Analysts on average were expecting $1.59, according to Thomson Reuters I/B/E/S.

Western Union's net income rose 28 percent to $221.5 million, or 42 cents per share, as total expenses fell 4 percent.

Total revenue declined 1 percent to $1.41 billion, mainly due to a stronger dollar. Analysts on average had expected a profit of 34 cents per share and revenue of $1.44 billion.