Western Union Co. (WU:US), the world's biggest money-transfer business, said profit rose for the fourth straight quarter as overseas sales cushioned a U.S. slowdown.
Net income (WU:US) advanced 11 percent to $240.8 million, or 33 cents a share, from $216.3 million, or 28 cents, a year earlier, the Englewood, Colorado-based company said today in a statement. The average estimate of 23 analysts surveyed by Bloomberg was for profit of 34 cents a share.
Western Union, which gets more than half its revenue outside the U.S., has dropped (WU:US) 30 percent in New York trading since its August peak on concern that the U.S. economic slowdown will spread overseas. Chief Executive Officer Christina Gold is adjusting by closing call centers in the U.S., saying the company will save $35 million annually starting next year.
``Growth in Asia, the Middle East and South Asia are the keys to Western Union revenue growth,'' said Bryan Keane, an analyst at Credit Suisse Group AG, in an Oct. 15 research report. He rates the firm ``neutral.''
Western Union rose $1.17, or 6.1 percent, to $20.38 in New York Stock Exchange composite trading yesterday. The company advanced 11 percent in the past year through yesterday, compared with the 35 percent decline of the Standard & Poor's 500 Index.
Western Union withdrew its previous long-term growth targets for revenue and earnings per share because of ``slower growth'' in transactions than previous quarters. Western Union also narrowed its 2008 earnings per share estimate to $1.23 to $1.25, which includes 6 cents per share of restructuring expenses. The prior forecast was $1.22 to $1.26. The firm expects to issue 2009 estimates in January.
Revenue advanced 20 percent in the region (WU:US) with Europe, Middle East, Africa and South Asia, fueled by a 51 percent surge in India. The U.S. had a 3 percent drop, the slowest decline in two years.
Western Union avoided the mortgage investment woes of No. 2 ranked MoneyGram International Inc. (MGI:US), whose shares plunged more than 90 percent in the past year, forcing it to raise about $1.5 billion from a group led by Thomas H. Lee Partners LP.
Fourteen analysts recommend investors accumulate Western Union shares, 10 say ``hold'' and none ``sell,'' according to Bloomberg data (WU:US).
Western Union controlled 16 percent of the $269 billion money-transfer market in 2006, compared with 4 percent for MoneyGram and 2 percent for Euronet Worldwide Inc. (EEFT:US), according to a presentation posted on Euronet's Web site.
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