MoneyGram International Inc. (NASDAQ:MGI) reported earnings of 26 cents per share which surpassed the Zacks Consensus Estimate of 15 cents and increased 53% year over year.
Total revenue of $386.1 million was flat on a reported basis and increased 1% on a constant currency basis year over year, but lagged the Zacks Consensus Estimate of $391 million. Top-line growth faced pressure from economic and geopolitical challenges in certain markets.
Among the revenue components, fee and other revenue declined 3.1% year over year to $380.3 million, while investment revenue increased 2.1% year over year to $5.8 million.
Total operating expense remained unchanged year over year at $364 million.
The company is progressing well on its digital initiatives, evident by 13% growth in digital money transfer revenues. These represented 15% of total money transfer revenues.
Segment Update
The company’s Global Funds Transfer segment reported revenues of $366.8 million, down 2.2% year over year. Operating income of $26.1 million was up 2.4% year over year. Operating margin of 7.1% increased 70 basis points year over year.
In the Financial Paper products segment, the company reported revenues of $19.3 million, up 1.2% year over year. Operating income nudged up 0.3% year over year to $4.8 million. Operating margin remained unchanged at 24.9%.
Financial Update
Adjusted free cash flow was $26.8 million, down 15.2% year over year.
Cash and cash equivalent balance was $127.4 million at Mar 31, 2017 compared with $157.2 million at the end of 2016.
Merger with Ant Financial
Recently, the company entered into a merger agreement with Ant Financial Services Group. The merger agreement calls for the payment of $18.00 for each share of MoneyGram. The deal which has been unanimously approved by the directors of MoneyGram will close in the second half of 2017.
Zacks Rank and Other Releases
MoneyGram carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Among the other companies in the same space, Total System Services, Inc. (NYSE:TSS) , Fiserv, Inc. (NASDAQ:FISV) and Vantiv, Inc. (NYSE:VNTV) came up with first-quarter earnings beat of 5.93, 3.28% and 8.22%, respectively .
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Moneygram International, Inc. (MGI): Free Stock Analysis Report
Total System Services, Inc. (TSS): Free Stock Analysis Report
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