Western Union Hits 52-Week High: Q3 Earnings Drive Stock

On Nov 6, 2014, the stock of the world’s leading money transfer company Western Union Co. (WU) touched a 52-week high of $17.99.

The rise in the stock was propelled by strong third-quarter earnings which outpaced the Zacks Consensus Estimate by 12.8%. About 8.2 million shares exchanged hands in the last session.

Growth Drivers

Western Union’s strong third-quarter financial performance was a continuation of superior results and attractive revenue and earnings growth. The company posted an earnings surprise in each of the past four quarters, with an average earnings beat being 9.27%.

During the third quarter, the company’s operating income of 44 cents per share surpassed the Zacks Consensus Estimate of 39 cents and improved 13% year over year.

Western Union results infused confidence among investors, since earnings growth for the company was not skewed toward some particular segments but was broad based with all the segments witnessing increased revenues.

The company’s top line also surpassed the Zacks Consensus Estimate by 3.5% and increased 5% year over year.

Investors were also impressed by the positive results from Europe and in the Middle East despite a weak global economy and continuing geopolitical tensions.

The company’s constant thrust toward cost containment, digital and mobile innovation, compliance and cyber security assures investors’ about its future growth and productivity.

Optimism over the stock was also driven by the fact that Western Union upped its full-year earnings per share outlook to approximately $1.50, which is the high end of its previous range of $1.45 to $1.50.

Estimate Revision Shows Strength

Driven by optimism surrounding the stock, over the last 30 days, the Zacks Consensus Estimate for 2014 earnings per share climbed 2.7% to $1.51. For 2015, earnings estimates have gone up 1.3% to 1.59 per share.

Western Union carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other players worth considering include Fiserv, Inc. (FISV), Global Payments Inc. (GPN), and Green Dot Corp. (GDOT). All these stocks carry the same Zacks Rank as Western Union.