DENVER—The Western Union Co. on Tuesday reported a 7 percent increase in first-quarter net income amid favorable exchange rates and growth in international business, particularly in India and China.
The global money transfer company based in the Denver suburb of Englewood also reported a 2 percent increase in transactions in Mexico where business has slowed because of an immigration reform debate in the United States.
“It’s pretty stable,” Chief Executive Officer Christina Gold told The Associated Press. “It’s not a fast-growing corridor any more.”
Gold also said she believes all three presidential candidates have stated positions on immigration reform that will benefit the company.
Analysts were pleased with the overall results, which beat Wall Street estimates.
“There are always concerns from competitive pressures and economic pressures, but right now Western Union seems to have pretty clear sailing ahead for the next 12 to 24 months,” Calyon Securities analyst Craig Maurer said.
In a research note to clients, Goldman Sachs & Co. analyst Elizabeth Grausam singled out the improvement in the U.S.-Mexico business which had been “a key concern.”
For the quarter that ended March 31, Western Union reported net income of $207.1 million, or 27 cents per share, up from $193.2 million or 25 cents per share in the same quarter of 2007.
The results included $24 million in restructuring expenses related to a decision to close plants in Missouri and Texas and the elimination or relocation of other jobs.
Excluding the restructuring charges, the per share figure rose to 29 cents, up one cent from an average estimate by analysts who were surveyed by Thomson Financial.
Revenue rose 12 percent to $1.3 billion, including $33 million stemming from exchange rates involving the euro. It beat the analyst estimate of $1.24 billion.
Although domestic transactions fell 3 percent, transactions that originated outside the United States rose 29 percent. That included a 52 percent increase in revenue from India transactions and 35 percent in revenue from China transactions.
An additional $2 million in restructuring expenses will be recorded in the second quarter. For the year, restructuring charges were estimated at $69 million.
The company says it is confident it will meet its 2008 financial forecast, but has lowered its net profit target to account for restructuring charges.
Western Union forecast revenue growth for 2008 of 9 percent to 11 percent and cash flow from operations of $1.2 billion.
Shares rose 93 cents, or 4.4 percent, to $22.09 in midday trading.
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