Western Union, the world's biggest money-transfer business, gained the most in three years after reporting second-quarter profit that exceeded analysts' estimates.
Western Union climbed 7 percent to $18.16 at 10:12 a.m. in New York, the most intraday since April 2010 and the second-best performer in the Standard & Poor's Information Technology Index. The shares have gained 33 percent this year, compared with the 10 percent advance of the 70-company index.
Net income for the three months ended June 30 was $198.6 million, or 36 cents a share, the Englewood, Colorado-based company said today in a statement, beating by two cents the average estimate of 29 analysts surveyed by Bloomberg.
"Any time a company is progressing through a turnaround and they can put up a solid in-line quarter, you're generally going to get a positive reaction," Jason Kupferberg, an analyst at Jefferies Group LLC, said in a phone interview.
Western Union is on target to return to revenue and profit growth next year, Chief Executive Officer Hikmet Ersek, 52, said in the statement. In February, Ersek said that both would be reduced in 2013 as the company invested in its online business and cut prices to stay competitive as consumers shift away from cash.
"We're really where we said we'd be at the second quarter, and we're setting up that platform to grow on a long-term basis," Chief Financial Officer Scott Scheirman said in a phone interview.
Consumer-to-consumer transactions, Western Union's biggest revenue source, increased 3 percent in the three months ended June 30 compared with a 2 percent drop in the first quarter, according to the statement. The growth in transaction volume was bolstered by price reductions and investments in online enhancements, which contributed to a 3 percent decline in revenue from a year earlier, the firm said.
