(Reuters) - Western Union Co (WU.N), the world’s largest money transfer company, reported a 14 percent drop in quarterly profit as price cuts reduced transaction fees from its core consumer business.
Net income fell to $212 million, or 37 cents per share, in the first quarter, from $247.3 million, or 40 cents per share, a year earlier.
Total revenue fell 5 percent to $1.33 billion, while revenue from its consumer business, which accounts for nearly 80 percent of its total business, fell 7 percent during the quarter.
Analysts on average had expected earnings before items of 32 cents per share on revenue of $1.34 billion, according to Thomson Reuters I/B/E/S.
The company blamed the price cuts and compliance changes for a drop in revenue in its consumer business.
Western Union’s firm grip on consumer remittances is slipping after it lost last year an exclusive arrangement with a major Mexican financial services group that agreed to also deal with smaller rival MoneyGram International Inc MGI.N.
Exclusive agency deals are also under threat elsewhere. Western Union had said in an earlier filing that proposed laws in some countries in Africa, south Asia and eastern Europe would prevent such deals with agents.
Nimbler online players such as Boom Financial Inc and Xoom Corp XOOM.O, which went public in February, are also challenging Western Union’s dominance.
Western Union is cutting prices and investing in new technology to fight these threats and regain lost market share in a remittances market that the World Bank estimates hit $529 billion last year.
Revenue from the company’s electronic channels — which include Westernunion.com, account-based money transfer and mobile money transfer — rose 18 percent in the quarter.
The company also stood by its full-year earnings forecast of 1.33 to $1.43 per share.
The Englewood, Colorado-based company’s shares, which have gained about 3.5 percent since its last quarterly results, closed at $14.81 on the New York Stock Exchange on Tuesday and were unchanged after hours.
Reporting by Neha Dimri and Anil D'Silva in Bangalore; Editing by Maju Samuel