MoneyGram reported third-quarter results on Thursday (Nov. 2) that missed expectations as the firm grappled with some softness in its United States markets and some international corridors.
The total top line came in at $397.8 million, which was $20 million below Wall Street. Earnings stood at 24 cents a share, three cents shy of estimates.
Breaking down the top line, third-quarter money transfers comprised $356.8 million, which slipped three percent, and down five percent on a constant currency basis, year over year. The culprit was softness in the U.S. market. Beyond these shores, the company said, macroeconomic impact stemming from Africa hit transfer activity.
Among brighter spots, MoneyGram.com, the digital business, saw 23 percent growth on the heels of customer acquisitions. The segment’s digital money transfer revenues were up six percent, with the digital business coming in at 15 percent of total money transfer sales, a goal that had been previously disclosed by the company. The growth in digital activity was offset a bit by larger trends that included the impact of compliance requirements.
In commentary tied to the earnings release, MoneyGram said that the pending transaction with Ant Financial is still pending, with the two firms continuing to work with the Committee on Foreign Investment in the United States and other regulatory agencies.
In a statement, Alex Holmes, CEO of MoneyGram, stated that the revenue slip “reflects a changing macroeconomic environment including softness in previously strong markets and corridors, central bank intervention of capital flows and a volatile immigration environment, all impacting the money transfer business.
“The complexity of global compliance requirements is also affecting revenue as we implement enhanced solutions to comply with increasingly stringent AML and consumer fraud measures to protect our customers and the integrity of our network,” Holmes added.
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