(By Balaseshan) Western Union Co. (NYSE: WU), which provides global payment services, reported a 47% drop in quarterly earnings due to higher costs and expenses as well as a decline in consumer-to-consumer revenue. However, results exceeded Street's expectations.
Earnings for the fourth quarter were $237.9 million or $0.40 per share, down from $452.3 million or $0.73 per share last year. Adjusted earnings per share (EPS) rose to $0.42 from $0.40.
Total revenue marginally decreased to $1.425 billion from $1.431 billion. Pro forma revenue decline of 1% constant currency, including TGBP in the prior year period.
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Analysts, on average, polled by Thomson Reuters had expected a profit of $0.35 per share on revenue of $1.40 billion for the fourth quarter.
Consumer-to-Consumer revenue decrease of 2% on a reported and constant currency basis, with a transaction decline of 1%. For the Western Union brand, transactions increased 3% and constant currency revenue increased slightly.
Consumer-to-Business (C2B) payments revenue decrease of 1% reported, including a negative 3% impact from currency translation.
Looking ahead into the fiscal 2013, the company expects EPS of $1.33 to $1.43 and low single digit constant currency revenue declines. Street analysts predict EPS of $1.47 on revenue to decline 1.50%.
The company said it intends to implement additional cost savings initiatives, which are expected to generate about $30 million of related cost savings in 2013, and about $45 million in 2014.
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WU closed Tuesday's regular session up 0.63% at $14.34. The stock has been trading between $11.93 and $19.14 for the past 52 weeks.