Western Union Down 4% on Q2 Earnings Miss & Lowered Outlook

Shares of The Western Union Company WU have fallen 4.1% since it reported second-quarter 2025 results on July 28. The weaker-than-expected quarterly results were affected by weak performance in the CMT segment, lower revenues from Iraq and a decline in the North America retail business. However, improvements in the consumer services unit and branded digital business, as well as lower operating expenses, partially offset the negatives.

Western Union reported second-quarter 2025 adjusted earnings per share (EPS) of 42 cents, which missed the Zacks Consensus Estimate by 4.6%. The bottom line declined 4.5% year over year.

Total revenues were $1 billion, which fell 4% on a reported basis. Additionally, the top line missed the Zacks Consensus Estimate by 0.9%.

The Western Union Company Price, Consensus and EPS Surprise

The Western Union Company price-consensus-eps-surprise-chart | The Western Union Company Quote

Q2 Performance of WU

The adjusted operating margin remained steady at 19% in both the current and prior-year periods.

Total expenses dipped 5% year over year to $833.4 million and were lower than our estimate of $834.8 million. The year-over-year decline resulted from the lower cost of services and SG&A expenses.

Operating income of $192.7 million rose 1% year over year but lagged our estimate of $193.4 million.

Segment Analysis of WU

The CMT segment’s revenues fell 8% to $885 million. The metric missed the Zacks Consensus Estimate of $919.7 million.

Operating income was $167.7 million, which fell 12% year over year and also missed the consensus mark and our estimate of $180.4 million. The operating income margin decreased 100 bps year over year to 19%.

Transactions within the CMT segment declined 3% year over year, attributable to 9% transaction growth in the Branded Digital business. Branded Digital revenues, which accounted for 29% of CMT’s second-quarter revenues, improved 6% on a reported and adjusted basis.

The CS unit recorded revenues of $141.1 million, which rose 39% on a reported basis and 41% on an adjusted basis. The metric beat the Zacks Consensus Estimate of $115.1 million and our estimate of $111.5 million.

Operating income of $31.6 million grew from the year-ago figure of $11.1 million, higher than the consensus mark and our estimate of $19.8 million. The operating income margin of 22% rose from the year-ago figure of 11%.

WU’s Financial Position (As of June 30, 2025)

Western Union exited the second quarter with cash and cash equivalents of $1 billion, which deteriorated from $1.5 billion at the end of 2024. Total assets of $8 billion decreased from $8.4 billion at 2024-end.

Borrowings were $2.7 billion, down from $2.9 billion as of Dec. 31, 2024.

Total stockholders' equity of $883.6 million declined from the 2024-end figure of $968.9 million.

WU generated net cash from operations of $147.9 million in the first six months, which surged from the year-ago figure of $60.2 million.

Western Union’s Capital Deployment

Western Union rewarded its shareholders with more than $150 million in the form of dividends and share buybacks in the second quarter of 2025.

WU’s Lowered 2025 View

Management now anticipates adjusted revenues to be between $4.035 billion and $4.135 billion, lower than the earlier estimated range of $4.115-$4.215 billion, the midpoint of which indicates a 2.7% decline from the 2024 figure of $4.198 billion.

Adjusted EPS is now forecasted to be in the range of $1.65-$1.75, lower than the earlier anticipated range of $1.75-$1.85, the midpoint of which indicates a 2.3% decline from the 2024 reported figure of $1.74.

GAAP EPS is forecasted in the band of $1.45-$1.55, lower than the earlier anticipated band of $1.54-$1.64, the midpoint of which implies a 45.3% decline from the 2024 figure of $2.74.

The adjusted operating margin is still expected to be between 19% and 21%. The metric was 19% in 2024.

WU’s Zacks Rank & Key Picks

WU currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the business services space are Coherent Corp COHR, APi Group Corp APG and TransUnion TRU. While Coherent and APi Group presently sport a Zacks Rank #1 (Strong Buy) each, TransUnion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Coherent’s current-year earnings of $3.52 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Coherent beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.2%. The consensus estimate for current-year revenues is pegged at $5.8 billion, implying 23% year-over-year growth.

The consensus estimate for APi Group’s current-year earnings of $1.41 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. APi Group beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 4.1%. The consensus estimate for current-year revenues is pegged at $7.5 billion, suggesting 7% year-over-year growth.

The Zacks Consensus Estimate for TransUnion’s current-year earnings of $4.1 per share has witnessed three upward revisions in the past 30 days against no movement in the opposite direction. TransUnion beat earnings estimates in each of the trailing four quarters, with the average surprise being 4.8%. The consensus estimate for current-year revenues is pegged at $4.5 billion, calling for a 6.3% year-over-year increase.

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This article originally published on Zacks Investment Research (zacks.com).

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