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MoneyGram (MGI) Q1 Earnings and Revenues Miss, Fall YoY
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MoneyGram International Inc. reported earnings of 9 cents per share, missing the Zacks Consensus Estimate by 52.6% and declining 133% year over year.
Total revenues of $380 million fell 2% on a reported basis and 5% on constant currency basis and missed the Zacks Consensus Estimate by 1.5%.
Results were affected by the impact of the newly implemented, industry-leading compliance standards, along with ongoing geopolitical challenges in certain markets.
MoneyGram International Inc. Price, Consensus and EPS Surprise
Among the revenue components, fees and other revenues declined 10.2% year over year to $370.1 million, while investment revenues increased 4.1% from the prior-year quarter to $9.9 million.
Total operating expenses of $374.3 million increased 11.6% year over year due to higher transaction and operations support, and compensation and benefits.
Adjusted EBITDA was $66.6 million, unchanged year over year. Adjusted EBITDA margin was 17.5%, up 30 basis points from the year-ago quarter.
Segment Update
MoneyGram’s Global Funds Transfer segment reported revenues of $357.4 million, down 9.4% year over year due to a decline of 1.5% in money transfer and 17.1% in bill payment revenues. The segment reported an operating income of $14 million against operating earnings of $25.2 million in the year-ago quarter. Adjusted operating margin of 8.4% was down 70 basis points year over year.
In the Financial Paper Products segment, the company reported revenues of $22.6 million, up 17.1% year over year. Operating income was up 16.1% from the prior-year quarter to $5.6 million. Adjusted operating margin decreased 10 basis points year over year to 27.9%.
Financial Update
Adjusted free cash flow was $29.4 million, up 8.8% from the prior-year quarter.
Total assets of $4.51 billion as of Mar 31, 2018 were down 5.5% from the Dec 31, 2017 level.
Growth Initiatives
During the reported quarter, MoneyGram under took business restructuring and reorganization program as part of its Digital Transformation initiative. In this regard it incurred $7.3 million of expenses in the quarter. The program is expected to cost nearly $15 million for 2018. The company expects the program to save $30 million of expenses in 2018 and $45 million on an annualized basis upon completion.
Tepid 2018 Guidance
Due to the impact of compliance rules and the revenue and income effect of the new Wal-Mart agreement, the company expects lower revenues and EBITDA for 2018. Including first-quarter results, the company estimates full-year 2018 constant currency revenues to decline between 4% and 6%. It expects capital expenditures to be roughly flat with 2017 at $85 million and bonuses of approximately $50 million. Adjusted EBITDA on a constant currency basis is expected to decline between 8% and 10%.
Among other Financial Services providers, American Express Co. (AXP - Free Report) , Total System Services, Inc. and Alliance Data Systems Corp. came up with flying colors, with the bottom line of each beating the respective Zacks Consensus Estimate in the first quarter.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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MoneyGram (MGI) Q1 Earnings and Revenues Miss, Fall YoY
MoneyGram International Inc. reported earnings of 9 cents per share, missing the Zacks Consensus Estimate by 52.6% and declining 133% year over year.
Total revenues of $380 million fell 2% on a reported basis and 5% on constant currency basis and missed the Zacks Consensus Estimate by 1.5%.
Results were affected by the impact of the newly implemented, industry-leading compliance standards, along with ongoing geopolitical challenges in certain markets.
MoneyGram International Inc. Price, Consensus and EPS Surprise
MoneyGram International Inc. Price, Consensus and EPS Surprise | MoneyGram International Inc. Quote
Among the revenue components, fees and other revenues declined 10.2% year over year to $370.1 million, while investment revenues increased 4.1% from the prior-year quarter to $9.9 million.
Total operating expenses of $374.3 million increased 11.6% year over year due to higher transaction and operations support, and compensation and benefits.
Adjusted EBITDA was $66.6 million, unchanged year over year. Adjusted EBITDA margin was 17.5%, up 30 basis points from the year-ago quarter.
Segment Update
MoneyGram’s Global Funds Transfer segment reported revenues of $357.4 million, down 9.4% year over year due to a decline of 1.5% in money transfer and 17.1% in bill payment revenues. The segment reported an operating income of $14 million against operating earnings of $25.2 million in the year-ago quarter. Adjusted operating margin of 8.4% was down 70 basis points year over year.
In the Financial Paper Products segment, the company reported revenues of $22.6 million, up 17.1% year over year. Operating income was up 16.1% from the prior-year quarter to $5.6 million. Adjusted operating margin decreased 10 basis points year over year to 27.9%.
Financial Update
Adjusted free cash flow was $29.4 million, up 8.8% from the prior-year quarter.
Total assets of $4.51 billion as of Mar 31, 2018 were down 5.5% from the Dec 31, 2017 level.
Growth Initiatives
During the reported quarter, MoneyGram under took business restructuring and reorganization program as part of its Digital Transformation initiative. In this regard it incurred $7.3 million of expenses in the quarter. The program is expected to cost nearly $15 million for 2018. The company expects the program to save $30 million of expenses in 2018 and $45 million on an annualized basis upon completion.
Tepid 2018 Guidance
Due to the impact of compliance rules and the revenue and income effect of the new Wal-Mart agreement, the company expects lower revenues and EBITDA for 2018. Including first-quarter results, the company estimates full-year 2018 constant currency revenues to decline between 4% and 6%. It expects capital expenditures to be roughly flat with 2017 at $85 million and bonuses of approximately $50 million. Adjusted EBITDA on a constant currency basis is expected to decline between 8% and 10%.
Zacks Rank and Other Releases
MoneyGram carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other Financial Services providers, American Express Co. (AXP - Free Report) , Total System Services, Inc. and Alliance Data Systems Corp. came up with flying colors, with the bottom line of each beating the respective Zacks Consensus Estimate in the first quarter.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>