UPDATE 3-Western Union Q1 profit down; says CEO to retire

* Q1 EPS $0.30 vs $0.32 last yr

* Rev up 3 pct to $1.23 bln, tops St. view

* CEO to retire, to be succeeded by COO

* Maintains full-year earnings outlook
(Recasts; adds conference call details, updates share
movement)

By Brenton Cordeiro

BANGALORE, April 27 (BestGrowthStock) – The world’s largest payment
transfer company Western Union Co (WU.N: ) reported a 7 percent
fall in quarterly profit, as expected, and named an insider to
replace its chief executive on her retirement.

CEO Christina Gold, 62, will be succeeded by Chief
Operating Officer Hikmet Ersek, effective Sept. 1.

Investors cheered the change in top management, sending the
shares up 9 percent to $19.57 in morning trade Tuesday on the
New York Stock Exchange.

“While she has been important in building the network and
taking the company public, we believe that the Street had been
hoping for a change in order to breathe some new life into the
story,” analyst David Parker of Lazard Capital Markets said.

The company saw its revenue double since Gold joined
Western Union as president in 2002.

Gold took over the reins of the company in 2006. Ersek
joined Western Union in 1999, and assumed the role of COO in
January this year.

For the first quarter, Western Union said its Americas
business — which comprises a third of its total revenue — was
seeing strong transaction growth in domestic money transfer and
improving trends in Mexico.

On a conference call with analysts, the company said it
expected domestic revenue growth to turn positive later this
year. Domestic revenue declined 13 percent in the quarter, but
domestic transactions grew 18 percent.

“Our transaction growth was aided by the double-digit
increase in the U.S. domestic money transfer business, but we
also saw better trends in the U.S.-outbound than Mexico, and
continued strength in Europe and Asia,” COO Ersek said on the
call.

Revenue at Western Union’s consumer-to-consumer segment,
which represented 84 percent of the company’s revenue, was $1
billion in the quarter, an increase of 3 percent from the prior
year, or flat on a constant-currency basis.

The improvement was primarily driven by the Americas
region, CEO Gold said on the call.

The company expects margins in the consumer-to-consumer
transactions to be higher in 2010.

Net income for the first quarter fell to $207.9 million, or
30 cents a share, from $223.9 million, or 32 cents a share last
year.

Western Union, which has 420,000 agent locations in 200
countries and territories, said total revenue was up by 3
percent to $1.23 billion.

Analysts on average were looking for a profit of 30 cents a
share, before items, on revenue of $1.22 billion, according to
Thomson Reuters I/B/E/S.

The company maintained its full-year earnings outlook of
between $1.29 and $1.34 a share.

Western Union, best known for its telegrams, has been
suffering as consumers send less money globally due to the
recession.

Stock Market Money

(Reporting by Brenton Cordeiro in Bangalore; Editing by
Maju Samuel, Unnikrishnan Nair)

UPDATE 3-Western Union Q1 profit down; says CEO to retire