Why Is Western Union (WU) Up 16.2% Since Last Earnings Report?

Core Viewpoint - Western Union reported a strong performance in Q4 2023, with adjusted EPS beating estimates and total revenues showing resilience despite a decline in certain segments [2][8]. Financial Performance - Adjusted EPS for Q4 2023 was 37 cents, exceeding the Zacks Consensus Estimate by 2.8% and reflecting a year-over-year increase of 15.6% [2]. - Total revenues for Q4 2023 were $1.05 billion, a decline of 3.7% year over year but a growth of 3% on a constant-currency basis, surpassing estimates by 4.8% [2]. - Adjusted operating margin improved to 16.1%, up 30 basis points year over year, aided by cost-saving measures and favorable currency changes [3]. Segment Performance - The Consumer Money Transfer (CMT) segment generated revenues of $975.5 million, down 1% year over year but beating estimates by 4.3%. Transactions in this segment increased by 5.2% year over year [4]. - The Consumer Services (CS) segment reported revenues of $76.8 million, a decline of 1% year over year, with operating income down 25% to $20.4 million [5]. Balance Sheet - As of December 31, 2023, Western Union had cash and cash equivalents of $1.27 billion, a slight decrease from $1.29 billion at the end of 2022. Total assets declined to $8.2 billion from $8.5 billion [6]. - Total stockholders' equity increased to $479 million from $477.8 million as of December 31, 2022 [7]. Full-Year Update - For the full year 2023, adjusted revenues were $4.5 billion, a 0.6% increase year over year, while total expenses decreased by 1% to $3.5 billion. Adjusted EPS for the year was $1.74, down 1.1% [8]. Capital Deployment - In 2023, Western Union returned $646 million to shareholders through dividends and share buybacks, with a dividend of 23.5 cents per share approved for Q1 2024 [9]. 2024 Guidance - The company anticipates adjusted revenues between $4.1 billion and $4.2 billion for 2024, indicating a decline of 7.2% from 2022. Adjusted EPS is expected to range from $1.65 to $1.75 [10]. - The company projects double-digit growth in the Consumer Services segment for 2024 and expects revenues from Iraq to be between $50 million and $100 million [10]. Market Position - Western Union has a subpar Growth Score of D and a Momentum Score of F, but a strong Value Score of A, placing it in the top quintile for value investment strategies [11]. - The stock has an aggregate VGM Score of C, indicating a balanced performance across different investment strategies [11].