MoneyGram Up; 1Q Beats Street, Raises FY06 EPS View
(MoneyGram's money transfer business, which grew 46%, - Vosilla you see a lot of those money transfer places in West Palm? - Sending the money home to latin america eh?)
By Josee Rose
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Shares of MoneyGram International Inc. (MGI) rose as much as 12% Thursday, reaching a new 52-week high, after the company boosted its full-year earnings and net revenue outlook, and reported first-quarter earnings that beat Wall Street's view.
The Minneapolis payment service company's net income rose 11% to $30.9 million, or 36 cents a share, from $27.8 million, or 32 cents a share, a year earlier. Revenue rose 16% to $263.7 million from $227.9 million.
According to Thomson First Call, on average, analysts expected earnings of 30 cents a share on revenue of $250 million.
Analyst Robert Dodd of Morgan Keegan & Co. said first-quarter results were driven by "strong growth" of money transfer revenues and higher-than-expected investment income.
For 2006 MoneyGram expects earnings of $1.36 to $1.41 a share, up from $1.25 to $1.30, while Wall Street expects earnings of $1.30.
MoneyGram raised its net revenue outlook, which excludes commission, to $565 million to $590 million, from $535 million to $560 million.
As a result, Craig Peckham of Jefferies & Co. raised his rating on MoneyGram to buy from hold, raised 2006 and 2007 earnings estimates and increased his price target to $38 from $27.
Peckham raised his 2006 earnings projection to $1.43 a share from $1.27, and thinks the company's guidance "remains conservative." For 2007, he expects $1.55, 10 cents higher than his previous prediction.
In 2005, MGI earned $1.31 a share.
Peckham upped the company to buy from hold since first-quarter results and 2006 guidance "assuaged our concerns over the yield curve and valuation."
Peckham said "signs of yield curve steepening and a Fed rate cycle that appears to be near an end are positives."
Dodd expects 2006 earnings of $1.39 a share and net revenue of $583 million, which factors in "higher net investment, overhead expenses and money-transfer revenue growth." He increased his 2006 operating earnings view to $1.31 from $1.27 a share.
MoneyGram's money transfer business, which grew 46%, "significantly outperforms its peers and we expect marketing investments to drive growth in excess of industry averages for the next several years," Dodd added.
MoneyGram shares were recently up $3.05, or 9.5%, at $35.08. Earlier, shares reached a new 52-week high of $35.00. The previous 52-week high was $32.04, reached on Wednesday and the 52-week low was $18.11, reached a year-ago today. Volume is 1.03 million shares, compared with average-daily-volume of 435,284.
-Josee Rose; 201-938-5400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
April 20, 2006 12:05 ET (16:05 GMT)
Copyright (c) 2006 Dow Jones & Company, Inc.- - 12 05 PM EDT 04-20-06 |
