What's in Store for Western Union's (WU) Earnings in Q2?
The Western Union Co. WU is set to report second-quarter 2021 earnings on May 4, after the market closes.
Q2 Earnings and Revenue Estimates
The Zacks Consensus Estimate for the company’s second-quarter earnings per share is pegged at 47 cents, indicating an increase of 14.63% from the year-ago period’s reported figure. The consensus mark for the same-period revenues stands at $1.25 billion, suggesting 12.08% growth from the year-earlier quarter’s reported number.
Let’s see how things have been shaping up for this announcement.
Western Union has been making heavy investments in its digital money transfer arm and building a leading omni-channel platform for a while now, which yielded results for the company amid the COVID-induced turmoil. Digital partnerships and constant investments provided a boost to the company’s digital revenues. Based on a robust digital suite, management expects current-year digital revenues to reach around $1 billion, indicating the wave of optimism surrounding the company’s digital business. We thus expect to see increased contribution from the company’s digital platform in the to-be-reported results.
In other money transfer companies like PayPal Holdings, Inc. PYPL and MoneyGram International Inc. MGI, earnings beat the Zacks Consensus Estimate by 1.77% in the first case while the same met estimates in the other one.
Western Union’s Business Solution segment continues witnessing revenue declines since the past many years except for the year 2019 when it grew 4%. The same was again down 8% during 2020. Revenue weakness was the result of dwindled cross-border trade and the adverse impact of the pandemic on education, travel and tourism as well as small and medium-sized enterprises. Therefore, this segment is likely to have remained stressed through second-quarter 2021.
The company’s margins are expected to have been aided by targeted productivity savings and expense management, led by the WU Way lean program and organizational efficiencies.
The company resumed share repurchases in the second quarter of 2021, which might have driven its bottom line during the period.
Earnings Surprise History
The company’s bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the mark in one), the average beat being 10.02%. This is shown in the chart below:
The Western Union Company Price and EPS Surprise
The Western Union Company price-eps-surprise | The Western Union Company Quote
What Our Quantitative Model Predicts
Our proven model does not predict an earnings beat for Western Union this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat but this is not the case here.
Earnings ESP: Western Union has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Western Union carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
A Stock to Consider
One stock worth considering with the apt combination of elements to surpass estimates this reporting cycle is EVO Payments, Inc. EVOP. The stock has an Earnings ESP of +12.71% and a Zacks Rank of 3, currently.
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MoneyGram International Inc. (MGI) : Free Stock Analysis Report
The Western Union Company (WU) : Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report
EVO Payments, Inc. (EVOP) : Free Stock Analysis Report
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