Last week, Western Union Co. (WU) announced the completion of its previously announced service offering through Fifth Third Bancorp (FITB).

Western Union entered into an agreement with Fifth Third Bank last year to provide money remittance service to its customers. The service will be open across all the 1,300 bank locations of Fifth Third in 12 states. Western Union will provide the remittance services through Cash-to-Cash, Account-to-Cash and Account-to-Account. The rollout of this service is a part of Western Union’s “go-to-market” strategy.

Western Union aims to be a leader in the U.S. market. It expects the margin from its American business to significantly improve from 2009 year levels; however, pressure on U.S. bill payments will remain a headwind. The company is also planning to add more banks to its distribution network, bringing new customers and the potential to provide Account-to-Cash offerings.
 
Last month, the company entered into an agreement with Brazil-based Banco Bradesco (BBD) to offer global money transfer service at most of the bank’s branches in Brazil. It also announced the signing of agreements to provide payment services with four regional Chinese commercial banks.

Apart from adding bank channels, Western Union is offering new products and services through the electronic channel, such as westernunion.com, prepaid cards and mobile banking to take advantage of the rapid growth occurring in electronic payments.

Estimate Revision

Over the last 30 days as well as the last 7 days, the stock of Western Union has not experienced any estimate revisions for the first quarter 2010 from the 22 analysts covering the stock. Currently, the Zacks Consensus Estimate for the first quarter is an operating profit of 30 cents per share, which would be down 6.25% from the year-ago quarter.

The absence of estimate revisions for the first quarter indicates a lack of any clear directional pressure on the performance of the stock in the near term.

With respect to earnings surprises, the stock has been steady over the last four quarters, with positive surprises all through. The average remained positive at 6.9%. This implies that Western Union has surpassed the Zacks Consensus Estimate by 6.9% over that period.
Read the full analyst report on “FITB”
Read the full analyst report on “WU”
Read the full analyst report on “BBD”
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