Western Union reported second quarter (Q2/15) revenues declined 2% year-on-year (YOY), primarily due to the impact of the stronger U.S. dollar, however on a constant currency basis, Q2/15 revenues increased 4% YOY.
In Q2/15 Consumer-to-Consumer (C2C) revenues declined 3%, although transactions and constant currency revenues each increased 3%. Westernunion.com C2C revenue increased 22%, or 28% constant currency, on transaction growth of 27%. Electronic channels revenue, which includes westernunion.com, account based money transfer through banks, and mobile money transfer, increased 19% in the quarter and represented 7% of total Company revenues.
Consumer-to-Business (C2B) revenues grew 8% in the quarter, or 12% constant currency, driven by the Argentina walk-in and the U.S. electronic bill payments businesses.
Western Union Business Solutions revenues decreased 1%, or increased 9% on a constant currency basis. Constant currency growth was driven by Europe and led by strong sales of hedging instruments.
In the quarter, the Company recorded a pre-tax charge of $35.3 million related to its Paymap subsidiary’s settlement with the CFPB. The CFPB previously claimed that certain aspects of the marketing of Paymap’s Equity Accelerator service violated the Consumer Financial Protection Act’s prohibition against unfair, deceptive, and abusive acts and practices. The Company agreed to resolve the matter without admitting or denying the allegations. After-tax, the charge amounted to $24.2 million, or $0.05 per share.
The Company updated its outlook for 2015 (adjusted metrics exclude the impact of the Paymap settlement):
• Low to mid-single digit constant currency revenue increase (previously low single digit increase)
• Low to mid-single digit GAAP revenue decrease
Operating Profit Margin
• Adjusted operating margin of approximately 21%
• GAAP operating margin of approximately 20%
1Q/14 60.24 million
2Q/14 63.96 million
3Q/14 65.31 million
4Q/14 65.42 million
1Q/15 61.75 million
2Q/15 65.76 million
Source: Western Union
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