The Western Union Company (WU) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $355 million, or $ 0.73 a share in the quarter, against a net profit of $212.30 million, or $0.42 a share in the last year period. On an adjusted basis, net profit for the quarter was $229.90 million, when compared with $212.30 million in the last year period.
Revenue during the quarter went down marginally by 0.60 percent to $1,371.70 million from $1,380 million in the previous year period. Gross margin for the quarter contracted 289 basis points over the previous year period to 38.34 percent. Operating margin for the quarter stood at negative 22.85 percent as compared to a positive 20.42 percent for the previous year period.
Operating loss for the quarter was $313.50 million, compared with an operating income of $281.80 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $336 million compared with $350.80 million in the prior year period. At the same time, adjusted EBITDA margin contracted 93 basis points in the quarter to 24.50 percent from 25.42 percent in the last year period.
"We are pleased to have delivered a solid business performance in the fourth quarter, despite ongoing macro challenges," said president and chief executive officer Hikmet Ersek. "Our digital efforts continue to produce notable results, with westernunion.com money transfer achieving 28 percent transaction growth in the quarter."
For fiscal year 2017, The Western Union Company expects operating income to grow at 18 percent. It expects adjusted operating income to grow at 20 percent. It projects diluted earnings per share to be in the range of $1.48 to $1.60. It projects diluted earnings per share to be in the range of $1.63 to $1.75 on adjusted basis for the same period.
Operating cash flow falls marginally
The Western Union Company has generated cash of $1,041.90 million from operating activities during the year, down 2.73 percent or $29.20 million, when compared with the last year.
The company has spent $271.10 million cash to meet investing activities during the year as against cash outgo of $286.40 million in the last year.
The company has spent $1,209.20 million cash to carry out financing activities during the year as against cash outgo of $1,252 million in the last year period.
Cash and cash equivalents stood at $877.50 million as on Dec. 31, 2016, down 33.32 percent or $438.40 million from $1,315.90 million on Dec. 31, 2015.
Debt comes down
The Western Union Company has recorded a decline in total debt over the last one year. It stood at $2,786.10 million as on Dec. 31, 2016, down 13.36 percent or $429.80 million from $3,215.90 million on Dec. 31, 2015. Total debt was 29.58 percent of total assets as on Dec. 31, 2016, compared with 34 percent on Dec. 31, 2015. Debt to equity ratio was at 3.09 as on Dec. 31, 2016, up from 2.29 as on Dec. 31, 2015.
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