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MoneyGram (MGI) Q3 Earnings and Revenues Miss Estimates

Zacks Equity Research

MoneyGram International Inc. MGI posted third-quarter loss of 7 cents per share, against the Zacks Consensus Estimate of earnings of 4 cents per share. In the year-ago quarter, the company reported earnings of 8 cents per share.

The company’s total revenues of $324.6 million declined 6.5% year over year and missed the Zacks Consensus estimate by 1.3%.

MoneyGram’s results reflected business decline in the U.S market, partly offset by transaction growth outside of the United States.

MoneyGram International Inc. Price, Consensus and EPS Surprise

 

MoneyGram International Inc. Price, Consensus and EPS Surprise

MoneyGram International Inc. price-consensus-eps-surprise-chart | MoneyGram International Inc. Quote

 

Among the components of revenues, fees and other revenues declined 6.7% to $311.2 million, while investment revenues remained almost unchanged at $13.4 million.

Adjusted EBITDA of $51.7 million declined 13.1% year over year.

Adjusted EBITDA margin of 15.9% declined 120 basis points year over year.

Total operating expenses declined by 14% year over year to $308.2 million.

Segments in Detail

In the Global Funds Transfer segment, money transfer revenues decreased 6.8% year over year to $299.6 million. Bill payment revenues were also down by 15.5% year over year to $14.7 million. Operating margin improved 940 basis points from the year-ago quarter to 3.3%.

The Financial Paper Products segment reported total revenues of $25 million, down 2.3% year over year due to a 0.9% decline in money order revenues.

Adjusted operating margin improved 710 basis points from the year-ago quarter to 30.4%.

Liquidity

The company ended the third quarter of 2019 with cash and cash equivalents balance of $119.1 million, down 18.1% year over year.

During the quarter, the company generated adjusted free cash flow of $9.3 million, down 67.8% year over year.

As of Sep 30, 2019, the company’s pension liability was down by 6.4% from the year-end 2018 level to $71.7 million.

2019 Guidance Update  

For the fourth quarter of 2019, the company anticipates total revenues of approximately $330 million, and adjusted EBITDA of approximately $50 million.

Zacks Rank and Other Stocks

Currently, MoneyGram carries a Zacks Rank #3 (Hold). Some other stocks worth considering are Moody’s Corp. MCO, Globe Life Inc. GL and Oaktree Specialty Lending Corp. OCSL.

Each of these stocks carries a Zacks Rank #2 (Buy) and have surpassed estimates in three of the four reported quarters with an average positive surprise of 4.51%, 1.53% and 6.63%, respectively.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Moody's Corporation (MCO) : Free Stock Analysis Report
 
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Oaktree Specialty Lending Corp. (OCSL) : Free Stock Analysis Report
 
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