Western Union Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of 43 cents per share, a rise of 2.4% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 10.8% versus last year to $1.74.
Past Earnings Performance: The company has met estimates the last three quarters. Last quarter, the company reported profit of 40 cents per share to fall in step with the mean estimate.
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A Look Back: In the first quarter, profit rose 17.6% to $247.3 million (40 cents a share) from $210.2 million (32 cents a share) the year earlier, meeting analyst expectations. Revenue rose 39.6% to $1.39 billion from $998 million.
Wall St. Revenue Expectations: Analysts are projecting a rise of 5.8% in revenue from the year-earlier quarter to $1.45 billion.
Stock Price Performance: Between April 23, 2012 and July 18, 2012, the stock price fell 92 cents (-5.1%), from $17.95 to $17.03. The stock price saw one of its best stretches over the last year between October 3, 2011 and October 12, 2011, when shares rose for eight straight days, increasing 11.8% (+$1.76) over that span. It saw one of its worst periods between May 1, 2012 and May 9, 2012 when shares fell for seven straight days, dropping 6.6% (-$1.22) over that span.
This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 0.5% in the third quarter of the last fiscal year and 86.4% in the fourth quarter of the last fiscal year before increasing again in the first quarter.
On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 7.3% in the second quarter of the last fiscal year, 6.1% in the third quarter of the last fiscal year and 5.5% in the fourth quarter of the last fiscal year before increasing again in the first quarter.
Analyst Ratings: There are 15 out of 25 analysts surveyed (60%) rating Western Union a buy.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.16 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.14 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in current assets. Current assets increased 2.7% to $4.58 billion while liabilities rose by 0.4% to $3.94 billion.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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