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Western Union Q3 2009 Earnings Call Transcript
Author: 123jump.com Staff
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Last Update: 3:20 AM ET October 30 2009

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The Western Union Company third quarter revenues fell 5% to $1.31 billion and net income fell 25% to $181 million or 26 cents a share.


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Christina A. Gold

Thanks.

Operator

And our next question will come from the line of Julio Quinteros with Goldman Sachs. Please proceed.

Julio C. Quinteros - Goldman Sachs

Sure. Scott, I guess, just to, maybe push a little bit on the 2010 situation and picking up on the comments that as things begin to improve here you would expect to see some margin expansion. Any way to sort of frame or bracket what type of margin expansion we should be thinking about in this model as you guys get back to growth into 2010?

Scott T. Scheirman

You know, it''s probably little early to talk really specifically about 2010 in specific terms but let me give you some of our thinking and how we''re thinking about the business. That we want to balance strong margins with investing in the business which is very important for us and our shareholders, if you look at 2009, we''re projecting 27% margins in a year when revenues will be down 1% or 2% on a constant currency basis. We''ve also made investments in the business with Custom House and FEXCO, which clearly impacted our margins but still able to deliver 27%.

So as we look at the future, we believe when the market improves, as revenue grows, our business model, to your point will support margin expansion. But our objective is to deliver strong margins but investing in the business for future growth is important. And as I mentioned earlier, the Custom House or the B2B space is one of those areas but we have an objective as a management team to have strong margins for sure.

Julio C. Quinteros - Goldman Sachs

Got it. Great. And just for perspective, is there any way to break out the sort of the incremental amortization from, say 2009 versus 2008, just to get a sense on what the additional amortization has been to the overall operating profit line from both FEXCO and Custom House?

Scott T. Scheirman

You know, Julio, I don''t have that number at my fingertips. I know in the financial schedules we disclosed what our amortization is year-over-year. But let us think about providing that additional detail on a go forward basis.

Julio C. Quinteros - Goldman Sachs

Okay. Great. Thanks, guys. Good luck.

Operator

And our next question will come from the line Ashwin Shirvaikar with Citigroup. Please proceed.

Ashwin Shirvaikar – Citigroup

Thank you. Guys, the changes that you made in U.S. domestic, when do you expect to see that business improve, is it possible to layout what specific expectations you have over the next few quarters maybe?

Christina A. Gold
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