Western Union (WU) Q3 earnings report preview: what to look for

What happened

Western Union will report third-quarter results on Wednesday after the market closes. Last quarter, revenue was $1.01 billion, down 1.3% from a year earlier, and the company missed analysts' revenue and EBITDA estimates. Analysts expect revenue to fall 1.1% this quarter.

Confirmed

Global impact / market context

Western Union earns money by moving funds for customers and taking a fee on each transfer, so falling revenue points to weaker transaction volumes, lower fees per transfer, or both. Another decline would extend a stretch of missed sales estimates and could pressure profit and the cash available to return to shareholders.

Analyst inference

Analysts have kept their estimates unchanged over the past 30 days, suggesting they expect business as usual. Peers Donnelley Financial Solutions and WEX posted revenue growth, so a Western Union decline would stand out and may shape how investors view the money-transfer business.

Analyst inference

What to watch

1. Watch whether reported revenue falls about 1.1% year on year, matching the analyst expectation, or whether the company misses Wall Street's revenue estimate again, as it has several times over two years. Confirmed
2. Watch for management's guidance on full-year earnings per share, which is profit divided by shares outstanding, after last quarter's guidance missed expectations significantly, and any comment on cost cuts. Proposed
3. Watch whether revenue weakness comes from fewer transfers or lower fees per transfer, because lower fees per sale would point to price competition and squeeze profit more than a simple volume dip. Analyst inference

Evidence

• stockstory.org