Western Union's Q3 Earnings Beat on CS Unit Strength, Lower Costs

The Western Union Company WU reported third-quarter 2025 adjusted earnings per share (EPS) of 47 cents, which surpassed the Zacks Consensus Estimate by 9.3%. The bottom line grew 2.2% year over year.Total revenues remained flat on a reported basis at $1 billion. The top line beat the consensus mark by 1.2%.The quarterly results benefited on the back of a declining expense level and strong performance of the Consumer Services (CS) segment. The Branded Digital business posted transaction growth. However, the upside was partly offset by a revenue drop in the Consumer Money Transfer (CMT) segment, impacted by weaker transactions.The Western Union Company Price, Consensus and EPS Surprise The Western Union Company price-consensus-eps-surprise-chart | The Western Union Company QuoteQ3 Performance of WUThe adjusted operating margin of 20% improved 100 basis points (bps) year over year on the back of cost efficiencies achieved. Total expenses came in at $830.7 million, which declined 5% year over year in the quarter under review and came lower than our estimate of $833.7 million. The year-over-year decline resulted from a fall in the cost of services and selling, general and administrative expenses.Operating income advanced 22% year over year to $201.9 million, which beat our estimate of $191.3 million.Segment Analysis of WUThe CMT segment recorded revenues of $878 million in the third quarter, which slipped 6% year over year. The metric fell short of the Zacks Consensus Estimate of $891 million and our estimate of $903.7 million.Operating income declined 9% year over year to $172.2 million. Nevertheless, the metric beat the consensus mark of $171 million and our estimate of $170.7 million. The operating income margin remained flat year over year at 20%.Transactions within the CMT segment on an adjusted basis, excluding Iraq, dipped 2% year over year. However, there was 12% transaction growth in the Branded Digital business. Branded Digital revenues, which accounted for 38% of CMT’s third-quarter revenues, rose 7% on a reported basis and 6% on an adjusted basis.The CS segment’s revenues climbed 49% year over year on a reported and an adjusted basis to $154.6 million in the quarter under review. The metric outpaced the Zacks Consensus Estimate of $128 million and our estimate of $121.3 million.Operating income totaled $34 million, which increased nearly fourfold year over year. The metric beat the consensus mark and our estimate of $27.2 million. The operating income margin improved 1,300 bps year over year to 22%.WU’s Financial Position (As of Sept. 30, 2025)Western Union exited the third quarter with cash and cash equivalents of $947.8 million, which plunged 35.7% from the 2024-end level. Total assets of $7.8 billion declined 7% from the figure at 2024-end. Borrowings were $2.6 billion, down 11.9% from the figure as of Dec. 31, 2024.Total stockholders' equity of $925.4 million slid 4.5% from the 2024-end level. WU generated net cash from operations of $408.3 million in the first nine months of 2025, which soared 49.9% from the prior-year comparable period.Western Union’s Capital DeploymentWestern Union rewarded its shareholders with $230 million in the form of dividends and $200 million in share buybacks in the first nine months of 2025.WU’s 2025 View MaintainedManagement reiterates adjusted revenues to lie between $4.035 billion and $4.135 billion.Adjusted EPS continues to be forecasted in the range of $1.65-$1.75, the midpoint of which indicates a 2.3% decline from the 2024 reported figure. GAAP EPS continues to be forecasted in the band of $1.45-$1.55, the midpoint of which implies a 45.3% decline from the 2024 figure. The adjusted operating margin is still expected to be between 19% and 21%. The metric was 19% in 2024.Zacks RankWestern Union currently has a Zacks Rank #4 (Sell).A Business Services Sector ReleaseOf the Business Services sector players that have reported third-quarter results so far, the bottom line of ManpowerGroup Inc. MAN beat the Zacks Consensus Estimate. ManpowerGroup reported third-quarter 2025 adjusted EPS of 83 cents, which beat the Zacks Consensus Estimate by 1.2% but decreased 35.7% year over year. Total revenues of $4.63 billion beat the consensus estimate by 0.6% and rose 2.3% year over year. Revenues from America of $1.1 billion increased 4.6% year over year on a reported basis and increased 5.5% at cc. In the United States, revenues reached $690.8 million, declining 0.9% year over year. Revenues from Southern Europe of $2.21 billion rose 5.2% on a reported basis but declined 1.3% at cc. Revenues from France were up 1.4% on a reported basis but down 4.7% at cc. Revenues from Italy amounted to $462.5 million and increased 10.3% on a reported basis and 3.7% at cc. Northern Europe revenues declined 1.4% on a reported basis and 6.7% at cc to $816.8 million. The company registered an operating profit of $66.6 million, down 6.1% year over year on a reported basis and 3.5% at cc.Upcoming ReleasesHere are some companies from the Business Services space, which according to our model, have the right combination of elements to beat on earnings this time around:FirstCash Holdings, Inc. FCFS has an Earnings ESP of +3.67% and a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for FCFS’ third-quarter 2025 earnings is $1.91 per share, indicating 14.4% growth from the year-ago quarter’s reported figure.FirstCash earnings beat estimates in each of the trailing four quarters, the average surprise being 9.19%. Global Payments Inc. GPN has an Earnings ESP of +0.62% and a Zacks Rank of 3 (Hold), at present. The Zacks Consensus Estimate for GPN’s third-quarter 2025 earnings is $3.23 per share, implying 4.9% growth from the year-ago quarter’s reported figure.Global Payments’ earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 1.46%. Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ManpowerGroup Inc. (MAN): Free Stock Analysis Report The Western Union Company (WU): Free Stock Analysis Report FirstCash Holdings, Inc. (FCFS): Free Stock Analysis Report Global Payments Inc. (GPN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks