In a release on
For the full year, the Company reported a revenue decline of 2 percent, or 1 percent on a constant currency basis, and earnings per share of
"We made good progress executing the key strategic actions we began to implement in late 2012," said President and Chief Executive Officer
The Company's 2014 outlook projects low to mid-single digit constant currency revenue growth and EPS in a range of
Fourth Quarter 2013 Results
Fourth quarter revenues were flat compared to the prior year period, and increased 1 percent on a constant currency basis. Consumer-to-consumer (C2C) revenues declined 1 percent, and were flat constant currency, as transaction gains were offset by the impact of previously implemented price reductions in certain corridors.
Total C2C transactions increased 9 percent in the fourth quarter, driven primarily by continued traction from the pricing investments which the Company began to implement in the fourth quarter a year ago and strong electronic channel growth.
Consumer-to-Business (C2B) revenues declined 2 percent, or increased 5 percent constant currency.
GAAP operating margin was 16.8 percent, which compares to 20.1 percent in the fourth quarter of 2012. The margin decline relates primarily to the impact of pricing and other strategic investments, higher compliance expense, and lower compensation expense in the prior year period, partially offset by lower marketing expense. Fourth quarter results included
Earnings per share of
Fourth Quarter Progress on Key Strategies
Strengthen consumer money transfer
The pricing investments intended to regain customer momentum continued to drive increased transaction volumes and usage. The investments helped deliver accelerated transaction growth in the second half of the year, as expected. In the fourth quarter, C2C transactions increased 20 percent in the corridors in which pricing investments had been implemented, or 15 percent excluding digital.
Electronic channels revenue increased 32 percent in the fourth quarter, and represented 5 percent of total Company revenue for the year. Westernunion.com online money transfer transactions increased 64 percent in the quarter, and transactions from account based money transfer through banks increased 63 percent.
Increase customers and usage in business-to-business
Generate and deploy strong cash flow for shareholders
Full year cash flow from operating activities totaled approximately
2014 Full Year Outlook
The Company's key strategic priorities for 2014 remain focused on strengthening consumer money transfer, with a continued emphasis on digital expansion; driving accelerated growth in Business Solutions; and generating and deploying strong cash flow for shareholders. The Company expects the following outlook for 2014, including the impact of previously announced actions to enhance compliance and regulatory programs:
-Low to mid-single digit constant currency revenue increase
-Flat to low single digit GAAP revenue growth, which reflects expected negative currency impact from certain emerging market countries
Operating Profit Margins
-GAAP operating margin in a range of 19 percent to 20 percent
-Compliance related expenses are expected to total approximately 3.5 percent to 4.0 percent of revenue in 2014
Earnings per Share
-GAAP EPS in a range of
-Cash flow from operating activities of approximately
Additional key statistics for the quarter and historical trends can be found in the supplemental tables included with this press release.
Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) results from taking operating income and adjusting for depreciation and amortization expenses. EBITDA results provide an additional performance measurement calculation which helps neutralize the operating income effect of assets acquired in prior periods.
Constant currency results assume foreign revenues and expenses are translated from foreign currencies to the U.S. dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year. Constant currency results also assume any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the U.S. dollar, net of the effect of foreign currency hedges, would have been consistent with the prior year. Additionally, the measurement assumes the impact of fluctuations in foreign currency derivatives not designated as hedges and the portion of fair value that is excluded from the measure of effectiveness for those contracts designated as hedges is consistent with the prior year.
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In a release on