MoneyGram International Inc. swung to a second-quarter profit on an 11% drop in operating expenses as revenue came in short of analysts' expectations.
The money-transfer service company has maintained stable performance in its global funds transfer business during the economic downturn.
Chairman and chief executive Pamela Patsley said Friday that despite a challenging economic environment and increased price pressure in the domestic market, the company delivered growth in money transfer transactions, revenue and its network. For the quarter, transfer revenue grew 1%, and was up 3%, excluding currency effects, on 7% more volume.
The company also said it expects its ongoing restructuring, which recorded $1.9 million in charges in the second quarter, to generate $25 million to $30 million in savings in 2012. Fitch Ratings in June boosted its outlook on the company, saying it expects modest growth this year.
MoneyGram's bigger competitor, Western Union Co., said last week that its second-quarter earnings had edged higher on increased transaction volumes and despite restructuring charges; it topped analysts' expectations.
MoneyGram reported a profit of $6.8 million, compared with a $3.3 million loss a year earlier. On a per-share basis, which includes preferred dividends, the company's loss narrowed to 31 cents, from 40 cents. The latest results included $3.5 million in writedowns. Revenue fell 3%, to $283.6 million, on weaker investment results.
Analysts surveyed by Thomson Reuters had estimated a loss of 28 cents a share, on average, and $299 million of revenue.
At midmorning Friday, Money-Gram's shares were trading at $2.58, down 3.01% from Thursday's closing price.
