Shares of First Data Corp. shed nearly 5 percent Friday after the company detailed how immigration-reform efforts cut into profits at its Western Union subsidiary.
“We didn’t anticipate the magnitude and impact on our business,” said First Data chief executive and chairman Ric Duques. “It is not surprising that as the leading money-transfer company we would be impacted sooner and to a greater extent.”
Immigrant workers in the United States are sending less money home in response to the uncertainty surrounding their future status in this country, Duques said. They appear to be holding onto more funds to deal with fines, fees and other costs should the country tighten its immigration policies.
Money transfers from the U.S. to Mexico, a key market for Western Union, grew only 6 percent in the second quarter, down from a 17 percent growth rate in the first quarter.
Western Union’s overall revenue growth rate was about 2 percent slower in the quarter than anticipated.
Despite that, First Data met the earnings and revenue targets that analysts had set for the second quarter. Shares at Colorado’s largest public company declined 4.8 percent Friday to close at $41.76, the lowest price since Nov. 25.
First Data plans to spin off Western Union into a separate company by year’s end, but both will be headquartered in the Denver metro area.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
