WU Renews Agreement with PSBC

• By Zacks Equity Research
• On 10:45 am EST, Friday November 6, 2009

The Western Union Co. (NYSE: WU - News) said on Thursday that it renewed its agreement with the Postal Savings Bank of China (PSBC) to provide Western Union Money Transfer services in China.

 

The renewal will help Western Union to continue its Money Transfer services through more than 20,000 locations of Postal Savings Bank in China.

 

Postal Savings Bank is a leading bank in China and since 2001 it has been a Western Union Agent. The Western Union management expects the renewal to drive results for Western Union from Postal Savings Bank’s network across urban and rural China.

 

Along with its Vigo, Orlandi Valuta and Pago Facil branded payment services, Western Union provides consumers with fast, reliable and convenient ways to send and receive money around the world, as well as send payments and purchase money orders.

 

Western Union’s third-quarter earnings of 33 cents per share were just a shade above the Zacks Consensus Estimate of 32 cents. While the results were almost in line with expectations, the company continued to experience the challenged economic environment.

 

Revenues for the quarter was $1.3 billion, down 5% year over year. On a constant currency basis, revenues were down 2%. The acquisition of Custom House aided revenue with $8 million. However, due to acquisition-related costs, Custom House added $5 million of operating loss too.

 

The continued deterioration in global unemployment has resulted in fewer transactions. However, we note that transaction, revenue, and pricing trends showed some improvement relative to the prior quarter. We remain encouraged, though we believe that we have to wait for some time to see any significant improvement as the economic turmoil is expected to persist for a while.

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