Money transfer company Western Union declared its quarterly results for the quarter ending December 2011. The company declared $452.3 million, or 73 cents per share, almost double the $242.6 million, or 37 cents per share, that it earned in the same period a year before. But the company is not positive of its outlook for 2012. The company expects decrease in revenues as it plans to restructure its business.
It hopes to integrate Global Business Payments, including amortization for Western Union Business Solutions, which includes the new Travelex Global unit, of about $60 million in 2012. The company also expects the situation in Europe to affects its performance. The company said it expects to earn adjusted net income of $1.70 per share and $1.75 per share in 2012, after excluding one-time items like acquisition costs. Also during the quarter the company said it would pay $220 million to the U.S. Internal Revenue Service and various state tax authorities to resolve tax issues. The payment adds to $250 million Western Union already made to the IRS in 2010
Commenting on the results Hikmet Ersek stated that “While there are some near-term market challenges in parts of the world, the long-term opportunities for revenue growth and margin expansion are strong. The company has a good network of around 485,000 locations. The company caters to low income customers who use it to spend money across to their families.
The company’s revenue from the customer to customer segment stood at a healthy 83 percent of the total revenue. t bought a Travelex unit for about $970 million last July, to expand its international business payments services. We maintain a sell on the stock due to the negative outlook provided by the management.