Western Union stock falls 4% on earnings miss despite revenue beat

Investing.com - On Firday, Western Union Company (NYSE: WU) reported first-quarter results that missed earnings expectations despite topping revenue estimates.

The company’s shares were down 4.29% in pre-market trading following the announcement.

The company posted adjusted earnings per share of $0.25, falling short of the analyst consensus of $0.39. Revenue came in at $983 million, slightly above the $965.42 million estimate and flat compared to the prior year period. On an adjusted basis, revenue declined 1% YoY.

The earnings shortfall was attributed to lower fixed cost coverage in owned locations, timing of vendor incentives, higher costs from new strategic partnerships, a large foreign currency loss, and an elevated tax rate.

"First quarter results reflect the continued challenges in our Americas retail business as well as a few discrete items affecting the quarter," said Devin McGranahan, President and Chief Executive Officer. "Looking ahead, the pending acquisition of Intermex is expected to strengthen our retail capabilities in the Americas, our stablecoin launch will modernize our payment systems, and continued investment in our digital channel is preparing us for a more digitally-focused future."

Consumer Services segment revenue grew 24%, or 33% on an adjusted basis, driven by expansion of the Travel Money business, including the Eurochange Limited acquisition, and higher bill payment revenues.

Branded Digital revenue increased 9%, or 6% adjusted, with transaction growth of 21% YoY. However, the Consumer Money Transfer segment saw revenue decline 3% on a GAAP basis, or 6% adjusted.

Operating margin compressed to 13% from 18% in the prior year period, impacted by higher North America expenses, lack of vendor incentive payments, increased commission expenses from new agent signings, and foreign currency impacts.

For full-year 2026, Western Union reaffirmed its outlook, projecting adjusted EPS of $1.75 to $1.85. The midpoint of $1.80 is slightly above the analyst consensus of $1.79. The company expects adjusted revenue growth of 6% to 9%.

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