ENGLEWOOD, Colo. (AP) -- The Western Union Co.'s net income fell 27 percent in the second quarter, as the payments company's expenses grew and revenue declined on lower transaction fees.
Even so, the company's results exceeded Wall Street's expectations. And management said the company is on target to return to revenue and profit growth next year. Investors reacted positively, drive shares more than 8 percent higher in morning trading on Tuesday.
Western Union reported net income of $198.6 million, or 36 cents per share, for the three months ended June 30. That compares with net income of $271.2 million, or 44 cents per share, in the prior-year quarter.
Analysts, on average, had anticipated earnings of 34 cents per share, according to FactSet.
Western Union's expenses grew 3 percent in the latest quarter, as the company spent more on selling, general and administrative costs. Interest expense also grew sharply.
Total revenue fell 3 percent to $1.39 billion from $1.43 billion a year earlier. Analysts had forecast $1.37 billion.
Transaction fees, which accounted for the bulk of total revenue, declined 4 percent versus the prior-year quarter, while foreign exchange revenue inched up 1 percent.
Still, management noted that consumer money transfer transaction growth rates accelerated during the quarter.
Western Union reiterated its outlook for the year, which calls for earnings per share to range from $1.33 to $1.43. Wall Street is expecting $1.43 per share.
Western Union shares rose $1.46, or 8.6 percent, to $18.44 in morning trading.