Western Union shares jump on earnings forecast
Associated Press
Published June 20, 2008 at 10:32 a.m.
Updated June 20, 2008 at 10:44 a.m.
NEW YORK — Money transfer services firm Western Union Co. saw its shares jump about 10 percent today as it said it expects 2008 earnings to be at the higher end of its guidance range of $1.18 to $1.22 a share. The company also raised its long-term earnings growth goal.
Excluding a charge of 7 cents a share tied to restructuring, Douglas County-based Western Union forecast earnings on the higher side of its operating earnings estimate of $1.25 to $1.29 a share.
Analysts polled by Thomson Financial, on average, forecast earnings of $1.28 a share for the year. Analysts do not always include special charges in their estimates.
Western Union now expects restructuring charges to total $79 million for the year, instead of $69 million because of a decision to close its San Francisco facility.
Western Union also raised its long-term earnings per share growth estimate to a range of 15 percent to 18 percent. The previous estimate was 12 percent to 14 percent.
“Our decision to raise the long-term EPS objective comes from our confidence that we are successfully executing on Western Union’s strategy that positions us extremely well in the huge and growing global money transfer marketplace,” Christina Gold, Western Union’s chief executive, said in a statement.
Western Union plans to improve profitability by accelerating growth in its consumer-to-consumer business, globalizing its consumer-to-business segment, developing new products and services, and reducing costs.
In midmorning trading on the New York Stock Exchange, Western Union shares were up $2.19, or 9.5 percent, to $25.35.
The company also said today its board had approved a plan to repurchase $1 billion in common stock.
Based on Thursday’s closing price of $23.16, Western Union will be able to buy back about 43.2 million shares of common stock under the repurchase program.
Western Union had about 740 million shares of common stock outstanding as of April 30.
Including previous repurchase plans, Western Union said it currently has about $1.7 billion available to buy back stock.
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