Western Union Q4 net income down 4%
Western Union has reported a net income of $212.3m for the fourth quarter of 2015, down 4% compared to $221.5m a year ago.
For the fourth quarter ended 31 December 2015, the money-transfer company reported total revenue of $1.38bn, down 2% from $1.40bn in the year-ago quarter due to the impact of the stronger US dollar.
However, revenues grew 3% on a constant currency basis for the quarter compared to the prior year period.
The group’s operating margin was 20.4% compared to 19.6% in the fourth quarter of 2014 due to lower expenses related to cost savings initiatives and benefits from foreign exchange hedges, partially offset by increased technology spending.
Earnings per share were $0.42, flat compared to the year ago period as increased operating profit and fewer diluted shares outstanding were offset by a higher effective tax rate.
Western Union said that its consumer-to-consumer (C2C) unit revenues increased 2% constant currency for the fourth quarter, and reported revenues declined 3%.
C2C transactions increased 3% in the quarter. The rise in C2C constant currency revenue was driven by strong performance from westernunion.com and solid growth from US outbound.
For the fourth quarter of 2015, Westernunion.com C2C revenue was up 21%, or 25% constant currency, on transaction growth of 28%, while electronic channels revenue, which includes westernunion.com, account based money transfer through banks, and mobile money transfer, represented 7% of total company revenues.
The company’s consumer-to-Business (C2B) revenues increased 4% in the fourth quarter, or 9% constant currency, driven by the Argentina walk-in and the US electronic bill payments businesses.
Western Union Business Solutions revenues grew 1%, or 8% on a constant currency basis.
The company returned $147m to shareholders through $69m of share repurchases and $78m of dividends for the quarter.
Western Union president and CEO Hikmet Ersek said: “Westernunion.com grew full year money transfer revenues by 26% in constant currency terms and increased penetration to 34 countries, and we introduced WU® ConnectSM, which enables leading third party digital platforms to offer our money transfer services to their users.
“Our network now connects online and mobile channels with over 500,000 agent locations and more than 100,000 ATMs and kiosks, and provides the capability to send money to over 1 billion accounts.
“We believe our business will continue to generate constant currency revenue growth and solid earnings and cash flow in 2016, despite macro challenges.”
Western Union executive vice president and chief financial officer Raj Agrawal said: “Strong cash flow generation allowed us to return over $800 million to our shareholders in 2015, while we also continued to invest in our technology platforms and compliance capabilities.”