About $9.4 million in combined legal and restructuring costs, plus another $3.5 million in stock-based compensation, affected MoneyGram International Inc.’s profitability, as first-quarter earnings dropped 26.4%, to $10.3 million from $14 million a year earlier, the company reported April 26.
Total revenue, however, rose 8.2%, to $318.1 million from $294 million, the funds-transfer company said.
In the company’s earnings release, Pamela H. Patsley, MoneyGram chairman and CEO, noted the double-digit revenue growth in all major funds-transfer categories, citing growth in sales agents, same-store sales improvements and the continued expansion of the firm’s self-service products as the key causes.
“We are particularly encouraged by the ongoing improvement in our bill-payment business,” she said “Our revenue growth and disciplined expense management is yielding margin expansion, and we continue to generate strong free cash flow.”
MoneyGram’s Global Funds Transfer unit reported $296.1 million in total revenue for the quarter ended March 31, up 9.7% from $269.8 million a year earlier. Money-transfer fee and other revenue totaled $268.3 million, up 12% from $239.6 million. Bill-payment fee and income revenue dropped 8.3%, to $27.6 million from $30.1 million.
According to the company’s earnings release, 17% growth in funds transfers outside the U.S. helped to drive the quarter’s 15% growth in money-transfer transactions for the quarter, as did 15% growth in internal U.S. transaction volume and a 12% rise in U.S. outbound transfers, particularly to Mexico, where volume rose 19%.
The number of global agent locations rose 18%, to 275,000.
Quarter highlights included the launch of a global marketing campaign targeting Filipinos that featured television and film star Robin Padilla. The company also added 1,800 locations in Mexico through an expanded agent agreement with Grupo Elektra. MoneyGram also expanded its relationship with Speedway SuperAmerica, a convenience-store chain with some 1,375 locations, to include its MoneyGram Xpress funds-transfer product.
And last month, ZipZap Inc. added MoneyGram’s 35,000 sites in the U.S. for consumers who prefer to pay for online purchases with cash (
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