Magazine article American Banker

1Q Earnings: Slippage in U.S. Remittances Hurt Western Union's Results

Magazine article American Banker

1Q Earnings: Slippage in U.S. Remittances Hurt Western Union's Results

Article excerpt

Western Union Co. said that continued weakness in its Mexico-bound and domestic remittance businesses and additional spinoff costs caused a 12% drop in first-quarter earnings.

The quarterly results, released late Tuesday, included $15 million in new payroll, public relations, and staffing expenses previously footed by First Data Corp., which spun off Western Union last year. The company's domestic transaction business declined by 6%, and the U.S.-to-Mexico channel grew by only 2% because of persistent concern about the immigration debate.

Mark Sproule, an analyst at Thomas Weisel Partners Group, said, "We pretty consistently expected this to be a tough quarter," but "in some regards we were a little bit surprised by the impact" of ongoing sluggishness in the Mexico and domestic businesses.

Still, Christina Gold, Western Union's chief executive, said on a conference call with investors Tuesday night that the company was "encouraged by the results and we believe we are making the right investments to drive continued improvements in these markets."

Ms. Gold said Western Union had continued its outreach program to Mexicans and U.S. immigrants, including a media tour in both countries, appearances on Hispanic radio, and meetings with Mexican cabinet members.

The company has continued to work with authorities, including the Arizona attorney general, "to ensure our consumers and their funds are treated with respect in accordance with the law," she said. …

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