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Western Union Q4 Profit Down 47% - Quick Facts

Western Union Co. (WU) reported that its fourth-quarter net income was $237.9 million or $0.40 per share, down from $452.3 million or $0.73 per share in the same quarter last year.

Earnings per share of $0.42 excluding TGBP integration expense, compared to $0.40 excluding the tax benefit related to the IRS Agreement in the prior year quarter. Earnings per share in the latest-year quarter included $0.03 of expense related to cost savings initiatives. Analysts polled by Thomson Reuters expected the company to report earnings of $0.35 per share for the quarter. Analysts' estimates typically exclude special items.

Other expense, net, of $41 million, compared to $6 million in the prior year period. The prior year period included gains of $20 million related to the revaluation of the Company's previous 30% ownership interest in Finint S.r.l. and $21 million related to foreign currency forward contracts primarily for the acquisition of TGBP.

Total revenues for the quarter were $1.425 billion compared to $1.431 billion in the prior year quarter. Twenty four analysts had consensus revenue estimate of $1.40 billion for the quarter.

For 2013, the company expects GAAP earnings to be in a range of $1.33 to $1.43 per share, including approximately $0.03 per share of after-tax expense related to TGBP integration activities. The company anticipates low single digit constant currency revenue declines for 2013. Analysts expect the company to report earnings of $1.47 per share on revenues of $5.55 billion for fiscal 2013.

The company expects pricing and other investments to result in revenue and operating profit declines in 2013, but lead to growth in 2014 and 2015 as a result of increased consumers and usage, additional products and services, and the benefits from the cost savings initiatives.

The company said it plans to implement additional cost savings initiatives. These actions are expected to have a negative impact on 2013 financial results, but have a positive impact beginning in 2014. The 2013 outlook includes approximately $45 million of expenses related to such initiatives, which is in addition to the $31 million incurred in the fourth quarter of 2012.

Expenses relate primarily to severance, outplacement and other related benefits, and other expenses related to relocation of various operations to existing Company facilities and third-party providers.

These initiatives are expected to generate approximately $30 million of related cost savings in 2013, and approximately $45 million in 2014. The 2013 outlook also includes approximately $20 million of expenses for TGBP integration activities.

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