MoneyGram International Inc. (MGI - Analyst Report) reported fourth-quarter 2014 operating earnings per share (EPS) of 13 cents, which lagged the Zacks Consensus Estimate of 19 cents by 31.6%. This brings the trailing four-quarter average earnings miss to 21.3%.
EPS also witnessed a drastic fall from the year-ago quarter figure of 35 cents. The market’s negative response was reflected in the 8.7% fall in the stock price following the earnings release.
Including adjustments, reported net income tanked to $10.5 million or 17 cents per share against $23.4 million or 33 cents per share in the year-ago quarter. The company also incurred a litigation liability worth $11 million during the reported quarter.
MoneyGram’s total revenue for the quarter was $349.6 million, down 9.4% from the year-ago period. While fee and other revenues decreased 9.2% to $346.7 million, investment revenues stood at $2.9 million, significantly down from $4.1 million in the year-ago period.
Total operating expenses rose 2.9% year over year to $352.6 million. Total commission expense declined 9.1% to $159.5 million. Subsequently, operating loss widened to $3 million against an income of $43 million in the year-ago quarter.
Interest expense also increased 15% from the prior year to $11.5 million. Total earnings before interest, taxes, depreciation and amortization (EBITDA) declined 27.9% year over year to $49.9 million, while adjusted EBITDA fell 22.5% to $59.2 million.
Quarterly Segment Results
In the Global Funds Transfer segment, revenues fell 9.5% year over year to $330.6 million. Money transfer transaction volume decreased 2%, while money transfer fee and other revenues declined 10.1% year over year to $305.7 million. Further, global agent locations improved 4% from the prior-year quarter to 350,000.
Total money transfer transactions originating outside the U.S. climbed 12% from the prior-year quarter. Additionally, U.S. outbound transaction increased 14%, reflecting double-digit growth for the 13th consecutive quarter, and driven by 14% growth in transactions to Mexico from the U.S. The company now enjoys about 17% market share in Mexico.
