- Revenue $1.4 Billion, Earnings per Share $0.37
- Consumer Money Transfer Business Continues Rebound; Transactions Grow 9%
- 2014 Full Year Financial Outlook Affirmed
The Company continues to focus on executing strategies to strengthen the consumer money transfer business, with an emphasis on digital expansion; to drive growth in Business Solutions; and to generate and deploy strong cash flow for shareholders.
In the first quarter, revenues increased 2% compared to the prior year period, or 4% on a constant currency basis.
Consumer-to-Consumer (C2C) revenues increased 3%, or 4% constant currency, while transactions increased 9%. Transaction growth continued to benefit from the previously implemented pricing actions in key corridors, as well as strong performance from westernunion.com online money transfer. Westernunion.com C2C transactions increased 55% in the quarter, and revenue increased 45%. Electronic channels, which include westernunion.com, account based money transfer through banks, and mobile money transfer, represented 6% of total Company revenues in the quarter.
Consumer-to-Business (C2B) revenues declined 4%, or increased 7% constant currency. The differential between reported and constant currency revenue changes in C2B was primarily the result of devaluation of the Argentine peso.
Western Union Business Solutions revenues increased 7%, or 10% on a constant currency basis, marking the third consecutive quarter of double digit constant currency revenue growth for the segment.
“We are pleased with the improved trends in our business,” said President and Chief Executive Officer Hikmet Ersek. “Our core money transfer business continued to rebound, and key growth areas such as westernunion.com and Western Union Business Solutions delivered strong performance. Financial results were on track with our full year outlook, and once again we were able to return significant funds to our shareholders, with nearly $250 million of share repurchases and dividends in the quarter.”
GAAP operating margin was 20.1% in the first quarter, which compares to 22.4% in the first quarter of 2013. The margin decline from prior year is primarily due to increases in C2C retail commission rates, higher compliance expenses, and C2B mix, partially offset by benefits from cost savings initiatives and lower integration costs.
Earnings per share were $0.37 both in the 2014 first quarter and in the prior year period.
First quarter cash flow from operating activities totaled approximately $197 million. The Company returned $248 million to shareholders in the quarter, consisting of $180 million of share repurchases and $68 million of dividends.
2014 Full Year Outlook
The Company affirms its full year outlook for 2014 provided on February 11:
- Low to mid-single digit constant currency revenue increase
- Flat to low single digit GAAP revenue growth, which reflects expected negative currency impact from certain emerging market countries
Operating Profit Margins
- GAAP operating margin in a range of 19% to 20%
- Compliance related expenses are expected to total approximately 3.5% to 4.0% of revenue in 2014
Earnings per Share
- GAAP EPS in a range of $1.40 to $1.50
- Cash flow from operating activities of approximately $900 million, or $1 billion excluding $100 million of anticipated final tax payments relating to the agreement announced with the U.S. Internal Revenue Service (IRS Agreement) in December 2011