A month has passed by for the reason that final earnings report for Western Union (WU). Shares have misplaced about 2.9% in that time-frame, outperforming the S&P 500.
Will the latest destructive development proceed main as much as its subsequent earnings launch, or is Western Union due for a breakout? Earlier than we dive into how traders and analysts have reacted as of late, let’s take a fast take a look at its most up-to-date earnings report with the intention to get a greater deal with on the vital drivers.
Western Union This autumn Earnings Miss Estimates on CMT Income Decline
Western Union reported fourth-quarter 2024 adjusted earnings per share (EPS) of 40 cents, which missed the Zacks Consensus Estimate by 4.8%. Nonetheless, the underside line improved 8.1% yr over yr.
Whole revenues have been $1.1 billion, which inched up 1% on a reported foundation on the again of robust contributions from the Client Companies (CS) phase and a well-performing Branded Digital enterprise. Moreover, the highest line surpassed the Zacks Consensus Estimate by 3.1%.
The quarterly outcomes suffered as a result of decrease contributions from the Client Cash Switch (CMT) phase and decreased contributions from Iraq. Nonetheless, the draw back was partly offset by robust efficiency within the retail overseas change enterprise and the launch of the media community enterprise. Moreover, a discount in total bills helped help margins.
This autumn Efficiency of WU
The adjusted working margin improved 100 foundation factors (bps) yr over yr to 17%, attributable to superior advertising and know-how efficiencies.
Whole bills dipped 1% yr over yr to $880.1 million, increased than our estimate of $822.5 million. The year-over-year decline resulted from decrease promoting, basic and administrative bills.
Working earnings of $178.1 million superior 12% yr over yr however lagged our estimate of $197.2 million.
Phase Evaluation of WU
The CMT phase’s revenues fell 4% on a reported foundation and remained flat on an adjusted foundation at $938.8 million. The metric beat the Zacks Consensus Estimate of $935.4 million and our estimate of $927.4 million.
Working earnings was $170 million, which rose 14% yr over yr however fell wanting the consensus mark and our estimate of $180.5 million. The working earnings margin improved 300 bps yr over yr to 18%.
Transactions throughout the CMT phase grew 3% yr over yr, attributable to 13% transaction development within the Branded Digital enterprise. Branded Digital revenues, which accounted for 25% of CMT’s fourth-quarter revenues, improved 7% on a reported foundation and eight% on an adjusted foundation.
The CS unit recorded revenues of $119.4 million , which soared 56% on a reported foundation and 23% on an adjusted foundation. The metric outpaced the Zacks Consensus Estimate of $88.3 million and our estimate of $92.3 million. The year-over-year development was pushed by the launch of the corporate’s media community enterprise, the enlargement of its retail overseas change operations and the continued development of the retail cash order enterprise.
Nevertheless, working earnings tumbled 34% yr over yr to $13.4 million, decrease than the consensus mark and our estimate of $16.8 million. Working earnings margin of 11% deteriorated 1,600 bps yr over yr.
WU’s Monetary Place (As of Dec. 31, 2024)
Western Union exited the fourth quarter with money and money equivalents of $1.5 billion, which superior 16.2% from the 2023-end stage.
Whole property of $8.4 billion elevated 2.1% from the determine at 2023-end.
Borrowings have been $2.9 billion, up 17.4% from the determine as of Dec. 31, 2023.
Whole stockholders’ fairness of $968.9 million greater than doubled from the 2023-end determine.
WU generated internet money from operations of $406.3 million in 2024, which plunged 48.1% from the 2023 determine.
Western Union’s Capital Deployment
Western Union rewarded its shareholders with $318 million in dividends and share buybacks value $177 million in 2024.
WU’s 2025 View
Administration anticipates adjusted revenues to be between $4.115 billion and $4.215 billion, the mid-point of which signifies a 0.8% decline from the 2024 determine of $4.198 billion.
Adjusted EPS is forecasted to be within the vary of $1.75-$1.85, the mid-point of which signifies a 3.4% enchancment from the 2024 reported determine of $1.74.
GAAP EPS is at the moment forecasted throughout the band of $1.54-$1.64, the mid-point of which suggests a 42% decline from the 2024 determine of $2.74.
Adjusted working margin is anticipated to be between 19% and 21%. The metric was 19% in 2024.
How Have Estimates Been Transferring Since Then?
Previously month, traders have witnessed a downward development in contemporary estimates.
VGM Scores
Presently, Western Union has a subpar Progress Rating of D, although it’s lagging a bit on the Momentum Rating entrance with an F. Nevertheless, the inventory was allotted a grade of A on the worth aspect, placing it within the prime 20% for this funding technique.
General, the inventory has an mixture VGM Rating of C. In case you aren’t centered on one technique, this rating is the one you ought to be thinking about.
Outlook
Estimates have been broadly trending downward for the inventory, and the magnitude of those revisions signifies a downward shift. Notably, Western Union has a Zacks Rank #3 (Maintain). We anticipate an in-line return from the inventory within the subsequent few months.
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The Western Union Company (WU) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
