Yahoo Finance MoneyGram (MGI) Q4 Earnings Beat on Record Digital Revenues
MoneyGram International, Inc. MGI reported fourth-quarter 2022 adjusted earnings per share of 23 cents, which beat the Zacks Consensus Estimate by 77%. The bottom line rose 4.5% year over year.
The company’s fourth-quarter results benefited from lower operating expenses and higher investment income due to higher short-term interest rates. Strong contributions from the Global Funds Transfer and Financial Paper Products segments also contributed to the quarterly results.
Revenues improved 5% year over year to $342.1 million and beat the consensus mark by 1.1%.
MoneyGram International Inc. Price, Consensus and EPS Surprise
MoneyGram International Inc. price-consensus-eps-surprise-chart | MoneyGram International Inc. Quote
Quarterly Operational Update
Fee and other revenues of $323.1 million inched up 0.1% year over year in the fourth quarter but missed the consensus mark of $326 million. Investment revenues increased 10 times to $19 million year over year, higher than the Zacks Consensus Estimate of $12.2 million.
Total operating expenses decreased 9% year over year to $125.5 million, mainly due to higher legal accruals recorded in the fourth quarter of 2021 and lower fourth-quarter transaction and operations support costs. Interest expense of $14.2 million rose 21% year over year in the quarter under review due to higher prevailing interest rates.
Adjusted EBITDA increased 4% year over year to $63.6 million. Adjusted EBITDA margin of 18.6% deteriorated 20 basis points year over year.
Segments in Detail
Global Funds Transfer
The segment reported revenues of $312.2 million, which inched up 0.3% year over year on the back of growing money transfer revenues. Segmental gross profit grew 1.3% year over year to $142.7 million.
Money transfer transactions improved 8% year over year in the fourth quarter. Cross-border online revenues of MoneyGram Online climbed 9% year over year, while transactions climbed 14% year over year. Active cross-border customer growth rose 11% year over year in the quarter under review.
Digital transactions increased 47% year over year, accounting for 47% of MoneyGram’s money transfer operations at the fourth-quarter end. Digital revenues attained a record figure of $98.6 million, climbing 33% year over year.
Financial Paper Products
Total revenues of $29.9 million increased 124.8% year over year. While money order revenues of $11.9 million improved 20.2% year over year, official check revenues increased more than five-fold to $18 million year over year. The segment reported a gross profit of $17.9 million for the fourth quarter, which grew 36.6% year over year.
Financial Position (as of Dec 31, 2022)
MoneyGram exited 2022 with cash and cash equivalents of $172.1 million, higher than $155.2 million at 2021-end. MGI’s payment service obligations of $3,607.2 million inched up from $3,591 million at 2021-end. Net debt dipped to $785.4 million from $786.7 million at 2021-end.
Adjusted free cash flow of $23.3 million plunged 32.2% year over year in the fourth quarter.
Capital expenditures came in at $13.6 million compared with $10 million in the year-ago period.
Merger Update
MoneyGram is expected to be acquired by Chicago-based private equity firm Madison Dearborn Partners, LLC, for $1.8 billion. The company is awaiting the Approval of Reserve Bank of India, after which a marketing period of 15 days will prevail, and the transaction will close a few business days after.
Zacks Rank
MoneyGram currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Industry Releases
Other Financial-Miscellaneous Services industry players that have reported results so far are Euronet Worldwide EEFT, Synchrony Financial SYF and American Express Company AXP. Let’s see how they’ve performed.
Euronet Worldwide reported fourth-quarter 2022 adjusted earnings of $1.39 per share, which outpaced the Zacks Consensus Estimate by 14.9% and our estimate of $1.20. The bottom line improved 21% year over year.
Total revenues amounted to $865.7 million, which rose 7% year over year or 16% on a constant-currency basis in the quarter under review. The top line beat the consensus mark by a whisker and our estimate of $855 million.
Synchrony Financial reported fourth-quarter 2022 adjusted earnings per share of $1.26, which outpaced the Zacks Consensus Estimate by 12.5%. However, the bottom line dropped nearly 15% year over year.
The net interest income of SYF amounted to $4,106 million, which improved 7.2% year over year. The top line beat the consensus mark by 1.7% and exceeded our estimate of $3,930.2 million.
American Express reported its fourth-quarter 2022 earnings of $2.07 per share, missing the Zacks Consensus Estimate of $2.18. The bottom line also decreased 5% year over year.
For the quarter under review, AXP’s total revenues net of interest expense increased 17% year over year to $14,176 million. The top line, however, missed the Zacks Consensus Estimate of $14,246 million.
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