The Western Union Company (WU) Bundle
A Brief History of The Western Union Company
The Western Union Company has a long-standing history in the financial services and communications industry, tracing its origins back to 1851. Initially established as a telegraph company, Western Union evolved into a leader in money transfer services. By the late 19th century, it had expanded its operations to include the first transcontinental telegraph line.
Financial Performance Overview
As of September 30, 2024, Western Union reported total revenues of $3,151.5 million for the nine months ended September 30, 2024, compared to $3,304.7 million for the same period in 2023. The company experienced a decline in revenues primarily due to the divestiture of its Business Solutions segment, which concluded on July 1, 2023.
| Period | Total Revenues ($ millions) | Net Income ($ millions) | Earnings Per Share ($) |
|---|---|---|---|
| Q3 2024 | 1,036.0 | 151.8 | 0.78 |
| Q3 2023 | 1,097.8 | 176.2 | 0.46 |
| 9M 2024 | 3,151.5 | 264.8 | 1.61 |
| 9M 2023 | 3,304.7 | 238.9 | 1.33 |
Dividends and Share Repurchase Program
Western Union has maintained a consistent dividend policy, declaring quarterly cash dividends of $0.235 per share in the first three quarters of 2024. Total dividends paid for the nine months ended September 30, 2024, amounted to $238.9 million, a decrease from $263.3 million in the same period of the prior year.
As of September 30, 2024, the company had repurchased 13.9 million shares for $177.3 million under its $1 billion stock repurchase program authorized in February 2022. The average cost of shares repurchased was $12.75 per share, with $170.9 million remaining under the authorization.
| Year | Quarterly Dividend ($) | Total Dividends Paid ($ millions) | Shares Repurchased (millions) | Amount Spent on Repurchases ($ millions) |
|---|---|---|---|---|
| 2024 | 0.235 | 238.9 | 13.9 | 177.3 |
| 2023 | 0.235 | 263.3 | 7.8 | 100.0 |
Recent Developments
In 2024, Western Union has continued to streamline its operations following the divestiture of its Business Solutions business. The company incurred costs related to redeployment programs, primarily associated with severance and organizational restructuring. As of September 30, 2024, total assets were reported at $1,535.1 million, with total liabilities standing at $17.1 million from derivatives, reflecting the company’s ongoing commitment to managing financial risk.
Debt and Liquidity Position
As of September 30, 2024, Western Union had total borrowings amounting to $2,586.7 million, with significant debt maturities scheduled for 2025. The company’s cash and cash equivalents, including restricted cash, totaled $1,427.6 million at the end of the third quarter in 2024. This liquidity position supports ongoing operations and potential future investments.
| Debt Type | Amount ($ millions) |
|---|---|
| Commercial Paper | 445.0 |
| 2.850% Notes due 2025 | 500.0 |
| 1.350% Notes due 2026 | 600.0 |
| 2.750% Notes due 2031 | 300.0 |
| 6.200% Notes due 2036 | 500.0 |
| 6.200% Notes due 2040 | 250.0 |
A Who Owns The Western Union Company (WU)
Major Shareholders
As of 2024, the ownership of The Western Union Company (WU) is distributed among various institutional and individual shareholders. The largest institutional shareholders include:
| Shareholder | Percentage Owned |
|---|---|
| BlackRock, Inc. | 8.1% |
| The Vanguard Group, Inc. | 7.5% |
| State Street Corporation | 5.3% |
| Invesco Ltd. | 4.9% |
| Wellington Management Company LLP | 4.3% |
Insider Ownership
Insider ownership is another important factor reflecting confidence in the company's future. As of September 30, 2024, the insider ownership structure is as follows:
| Insider | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Devon J. McCarty | CEO | 1.2 million | 0.35% |
| Richard L. Williams | CFO | 800,000 | 0.24% |
| Other Executives (combined) | N/A | 2.0 million | 0.59% |
Stock Performance and Market Capitalization
As of September 30, 2024, The Western Union Company had a market capitalization of approximately $4.0 billion. The stock price was trading at around $11.85 per share.
Institutional Ownership Trends
Institutional ownership has seen a modest increase over the past year, reflecting growing confidence among institutional investors:
| Institutional Investor | Ownership Percentage (2023) | Ownership Percentage (2024) |
|---|---|---|
| BlackRock, Inc. | 7.9% | 8.1% |
| The Vanguard Group, Inc. | 7.1% | 7.5% |
| State Street Corporation | 5.1% | 5.3% |
Recent Shareholder Actions
In the first nine months of 2024, Western Union repurchased approximately 13.9 million shares at an average price of $12.75, totaling $177.3 million. The remaining share repurchase authorization as of September 30, 2024, stood at $170.9 million out of the initial $1.0 billion program authorized in February 2022.
Dividend Distribution
The company declared quarterly cash dividends of $0.235 per share in the first three quarters of 2024, amounting to total dividends of $238.9 million for the nine-month period.
| Quarter | Dividend Declared | Total Dividends Paid |
|---|---|---|
| Q1 2024 | $0.235 | $79.4 million |
| Q2 2024 | $0.235 | $79.4 million |
| Q3 2024 | $0.235 | $79.4 million |
The Western Union Company (WU) Mission Statement
Mission Statement Overview
The mission of The Western Union Company is to connect people and businesses through innovative money transfer and payment solutions, providing reliable and convenient services globally. The company focuses on enhancing customer experience, expanding its digital capabilities, and supporting financial inclusion.
Financial Performance
As of September 30, 2024, Western Union reported total revenues of $1,036.0 million for the third quarter, compared to $1,097.8 million for the same period in 2023. The revenues for the nine months ended September 30, 2024, reached $3,151.5 million, a decrease from $3,304.7 million in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenues | $1,036.0 million | $1,097.8 million | $3,151.5 million | $3,304.7 million |
| Net Income | $264.8 million | $171.0 million | $548.5 million | $499.0 million |
| Earnings Per Share (EPS) | $0.78 | $0.46 | $1.61 | $1.33 |
| Operating Income | $164.9 million | $210.9 million | $547.7 million | $658.2 million |
Segment Performance
Western Union's business is divided into two primary segments: Consumer Money Transfer and Consumer Services. For the three months ended September 30, 2024, the Consumer Money Transfer segment generated revenues of $932.2 million, while the Consumer Services segment contributed $103.8 million.
| Segment Performance | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Consumer Money Transfer Revenue | $932.2 million | $1,019.0 million | $2,859.2 million | $3,029.5 million |
| Consumer Services Revenue | $103.8 million | $78.8 million | $292.3 million | $245.5 million |
Market and Operational Highlights
As of September 30, 2024, Western Union had cash and cash equivalents of $1,097.6 million and total liabilities of $7,023.1 million. The company’s total borrowings at par value were reported at $2,595.0 million, with a weighted-average effective rate on total borrowings of approximately 4.0%.
Shareholder Returns
The Board of Directors declared quarterly cash dividends of $0.235 per common share in the first three quarters of 2024, totaling $238.9 million for the nine months ended September 30, 2024.
| Shareholder Returns | Q3 2024 | Q3 2023 |
|---|---|---|
| Dividends Declared per Share | $0.235 | $0.235 |
| Total Dividends Paid (9M) | $238.9 million | $263.3 million |
Future Outlook and Strategic Focus
Western Union aims to enhance its digital infrastructure, expand its service offerings, and maintain a focus on operational efficiency to drive growth and improve customer satisfaction. The company continues to prioritize innovation and adaptability in a rapidly changing financial services landscape.
How The Western Union Company (WU) Works
Overview of Operations
The Western Union Company (WU) primarily operates in the global money transfer and payment services industry. As of 2024, its services are categorized into segments: Consumer Money Transfer and Consumer Services. The company facilitates cross-border money transfers, enabling consumers to send and receive funds internationally.
Financial Performance
For the nine months ended September 30, 2024, Western Union reported total revenues of $3,151.5 million, a decrease from $3,304.7 million in the same period of 2023. The breakdown of revenues by segment is as follows:
| Segment | 2024 Revenues (in millions) | 2023 Revenues (in millions) |
|---|---|---|
| Consumer Money Transfer | $2,859.2 | $3,029.5 |
| Consumer Services | $292.3 | $245.5 |
| Business Solutions | $0 | $29.7 |
Earnings and Expenses
The net income for the nine months ended September 30, 2024, was $548.5 million, compared to $499.0 million in 2023. Earnings per share (EPS) for the same period were $1.61, up from $1.33 in the prior year. The company reported total expenses of $2,603.8 million for the nine months ended September 30, 2024, down from $2,646.5 million in 2023.
Cash Flow and Liquidity
Western Union's cash and cash equivalents at the end of September 2024 were $1,427.6 million, compared to $1,647.8 million in September 2023. The net cash provided by operating activities for the nine months ended September 30, 2024, was $272.3 million.
Debt and Borrowings
As of September 30, 2024, Western Union had total borrowings of $2,586.7 million, consisting of commercial paper and long-term notes. The company’s commercial paper borrowings amounted to $445.0 million with a weighted-average interest rate of approximately 5.1%.
| Debt Type | Amount (in millions) |
|---|---|
| Commercial Paper | $445.0 |
| 2.850% Notes due 2025 | $500.0 |
| 1.350% Notes due 2026 | $600.0 |
| 2.750% Notes due 2031 | $300.0 |
| 6.200% Notes due 2036 | $500.0 |
| 6.200% Notes due 2040 | $250.0 |
Dividends and Share Repurchases
Western Union declared quarterly cash dividends of $0.235 per share for the first three quarters of 2024, totaling $238.9 million. The company repurchased 13.9 million shares for $177.3 million during the nine months ended September 30, 2024.
Market and Competitive Landscape
Western Union continues to face competition in the money transfer space, particularly from digital payment platforms and fintech companies. As of September 30, 2024, the company’s cross-border principal transactions were $76.4 billion for the nine months ended, slightly down from $76.5 billion in the same period of 2023.
Segment Analysis
Consumer Money Transfer revenues decreased by 6% year-over-year, while Consumer Services revenues increased by 19%. The company attributed revenue fluctuations to price reductions and changes in transaction volumes.
| Segment | 2024 Operating Income (in millions) | 2023 Operating Income (in millions) |
|---|---|---|
| Consumer Money Transfer | $567.4 | $601.9 |
| Consumer Services | $38.9 | $72.1 |
How The Western Union Company (WU) Makes Money
Business Segments
The Western Union Company operates primarily through two segments:
- Consumer Money Transfer
- Consumer Services
Consumer Money Transfer
This segment is the largest revenue generator for Western Union. It focuses on the transfer of funds between individuals, primarily for cross-border transactions. For the nine months ended September 30, 2024, revenues from the Consumer Money Transfer segment were:
| Region | Revenue (in millions) |
|---|---|
| North America | $1,089.9 |
| Europe and CIS | $699.8 |
| Middle East, Africa, and South Asia | $511.8 |
| Latin America and the Caribbean | $318.2 |
| Asia Pacific | $151.5 |
| Total Revenue | $2,859.2 |
In the three months ended September 30, 2024, the Consumer Money Transfer segment reported revenues of $932.2 million, a decline of 9% compared to the same period in 2023. Operating income for this segment was $188.3 million, with an operating income margin of 20%.
Consumer Services
This segment includes several services such as bill payments, money orders, and retail foreign exchange services. For the nine months ended September 30, 2024, revenues from the Consumer Services segment were:
| Service Type | Revenue (in millions) |
|---|---|
| Bill Payment Services | $X |
| Money Orders | $X |
| Retail Foreign Exchange | $X |
| Other Services | $X |
| Total Revenue | $292.3 |
The Consumer Services segment generated revenues of $103.8 million in the third quarter of 2024, marking a 32% increase from $78.8 million in the same quarter of 2023. Operating income for this segment was $9.2 million, resulting in an operating income margin of 9%.
Key Financial Metrics
For the nine months ended September 30, 2024, Western Union reported total consolidated revenues of $3,151.5 million, a decrease of 5% from $3,304.7 million in the same period of 2023. Operating income for the same period was $547.7 million, down 17% from $658.2 million.
Transaction Volume
Transaction volume is a critical driver of revenue in the Consumer Money Transfer segment. During the three months ended September 30, 2024, Western Union facilitated 72.6 million transactions, a 3% increase compared to 70.6 million transactions in the same quarter of 2023. The total value of cross-border principal transferred was $25.9 billion.
Foreign Currency Exposure
Western Union is exposed to foreign currency exchange risks, particularly from fluctuations in the euro and other currencies. As of September 30, 2024, a hypothetical 10% strengthening of the U.S. dollar would have resulted in a decrease of approximately $19 million in pre-tax annual income.
Investment Income
As of September 30, 2024, Western Union held approximately $2.3 billion in interest-bearing assets, with $0.9 billion bearing interest at floating rates. The company uses these investments to support its money transfer obligations and generate additional income.
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Western Union reported cash dividends of $238.9 million. The company also repurchased 13.9 million shares for $177.3 million during the same period. Cash and cash equivalents at the end of the period were $1,427.6 million.
The Western Union Company (WU) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- The Western Union Company (WU) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Western Union Company (WU)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Western Union Company (WU)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.