MoneyGram (MGI) Q4 Earnings Beat, Revenues Miss Estimates

MoneyGram International Inc.MGI reported earnings of 26 cents per share, beating the Zacks Consensus Estimate by 36.8%. Earnings grew 30% year over year.

Total revenues of $408.2 million declined 2% on a reported basis and 4% on constant currency basis but surpassed the Zacks Consensus Estimate of $403 million.

Top-line growth was impacted by a changing macroeconomic environment, including softness in previously strong markets and corridors, central bank intervention of capital flows, and a volatile immigration environment, which adversely affected the money transfer business.

MoneyGram International Inc. Price, Consensus and EPS Surprise

MoneyGram International Inc. Price, Consensus and EPS Surprise | MoneyGram International Inc. Quote

Among the revenue components, fees and other revenues declined 2.8% year over year to $399.4 million, while investment revenues increased 66% from the prior-year quarter to $8.8 million.

Total operating expenses of $464.7 million increased 18% year over year, due to higher transaction and operations support.

Adjusted EBITDA was $71.3 million, up 10% on a reported basis and 8% on constant currency basis, year over year. Adjusted EBITDA margin was 17.5%, up 200 basis points from the year-ago quarter.

Segment Update

The company's Global Funds Transfer segment reported revenues of $386.6 million, down 2.3% year over year due to a decline in money transfer and bill payment revenues. Money transfer revenue results were primarily impacted by weak U.S. to U.S. business and slower growth in Africa, partially offset by favorable currency movement. The segment reported an operating loss of $56.1 million against operating earnings of $25.8 million in the year-ago quarter.

In the Financial Paper Products segment, the company reported revenues of $21.6 million, up 10.2% year over year. Operating income nudged up 2% from the prior-year quarter to $5 million. Operating margin decreased 190 basis points year over year to 23.1%.

Financial Update

Adjusted free cash flow was $105.1 million, up 8.6% from the prior-year quarter.

Total assets of $4.77 billion as of Dec 31, 2017, increased 3.8% year over year.

Merger with Ant Financial Called Off

The merger of MoneyGram with Ant Financial Services Group has met a dead end after the deal was shown a red flag by the Committee on Foreign Investment in the United States (CFIUS).

Ant Financial, controlled by Alibaba's co-founder Jack Ma, was to acquire each share of MoneyGram for $18.00, which valued the deal at nearly $1.2 billion. Despite concerted efforts by both the companies involved to satisfy the CFIUS, the security concerns were a real bother.

Zacks Rank and Other Releases

MoneyGram carries a Zacks Rank #3 (Hold). Some of the stocks in the same space that reported better-than-expected results in the fourth quarter are Houlihan Lokey, Inc. HLI , Moody's Corp. MCO and American Express Co. AXP , which beat their respective Zacks Consensus Estimate by 21.1%, 41% and 2.6%, respectively. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Moody's Corporation (MCO): Free Stock Analysis Report

MoneyGram International Inc. (MGI): Free Stock Analysis Report

American Express Company (AXP): Free Stock Analysis Report

Houlihan Lokey, Inc. (HLI): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

Earnings Stocks

Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More