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MoneyGram (MGI) Q3 Earnings Beat Estimates, Revenues Miss

MoneyGram's (MGI) Q3 earnings suffer weak revenues and higher operating expenses.

This story originally appeared on Zacks

MoneyGram International, Inc. MGI reported third-quarter 2021 adjusted earnings per share of 13 cents, which beat the Zacks Consensus Estimate by 62.5%. Earnings were down 18.8% year over year.

- Zacks

Year over year, earnings declined due to lower revenues and a rise in operating expenses.

Quarterly Operational Update

Revenues of $319.6 million were down 1.1% year over year due to lower fee and other revenues. It also missed the Zacks Consensus Estimate by 3.24%.

Total operating expenses of $122.3 million increased 9% year over year, primarily due to higher transaction and operations support cost.

Interest expense dropped 43.5% year over year to $13 million in the quarter under review.

Adjusted EBITDA of $56.5 million fell 17.9% year over year due to $33.6 million of loss incurred on early extinguishment of debt.

Adjusted EBITDA margin contracted 360 basis points (bps) year over year to 17.7%

Segments in Detail

Global Funds Transfer

The segment reported total revenues of $306 million, which declined 0.8% year over year, induced by a 2% dip in Money Transfer revenues. The Money Transfer business of MoneyGram continued to perform well in the quarter, attributable to a 34% surge in revenues of its direct-to-consumer digital business MoneyGram Online (MGO). Digital revenues climbed 28% year over year and attained a record figure of $70 million.

MoneyGram has been investing heavily in the digital platform for a while and so has been another player in the same industry, which is Western Union Co. WU.

Financial Paper Products

Total revenues declined 6.8% year over year to $13.6 million. While money order revenues of $10 million dipped 4% year over year, official check revenues declined 14.3% year over year to $3.6 million.

Liquidity Position (as of Sep 30, 2021)

Cash and cash equivalents were $117 million, down 40.3% from the level at 2020 end.

The company’s payment service obligation as of Sep 30, 2021 was $3.6 billion. The figure declined 2.6% from the level as of Dec 31, 2020.

The company generated adjusted free cash flow of $33.5 million in the third quarter, which increased 32% year over year.

Capital expenditures were $10.2 million, reflecting a decrease of $0.5 million from the third-quarter 2020 level.

Q421 Guidance

Total revenues are estimated to be $325 million on the back of robust digital growth and more than 30% for MGO.

The company estimates adjusted EBITDA to be nearly $60 million. It does not include any benefit from Ripple incentive fees.

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 Finance Sector Releases

Among other players in the finance space, which have reported  third-quarter earnings so far, the bottom-line results of American Express Company AXP and Synchrony Financial SYF surpassed estimates by 27.53% and 12.08% respectively.


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


American Express Company (AXP): Free Stock Analysis Report


The Western Union Company (WU): Free Stock Analysis Report


Synchrony Financial (SYF): Free Stock Analysis Report


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