Shares of the world's largest payment transfer company, Western Union Co. (NYSE: WU), have been rallying in today's trading after the company reported a strong quarterly profit, helped by favorable exchange rates that lifted international business. Strong growth came especially from India and China, but the domestic market too provided significant revenue growth on higher demand for electronic bill payment services.

For the quarter, Western Union said that its profit jumped 7% to $207 million, or 27 cents a share, helped by strong gains from its international business. These numbers are up from $193.2 million, or 25 cents a share, reported in the same period a year earlier. Included in the company's earnings figures was $24 million related to restructuring charges. Excluding that, Western Union's earnings would have come at 29 cents per share, exceeding analysts' forecasts for a quarterly profit of 28 cents a share.

Western Union posted a respectable growth of 12% year-over-year, climbing to $1.3 billion. During the period, Western Union benefited from the slumping dollar, a major driver for its international business. Analysts expected the company show revenue of $1.24 billion in the first-quarter, according to Thomson Financial.

Global Payments (NYSE: GPN) is a high-volume payments processor of electronic transactions and related money transfers. It performs point-of-sale credit card, debit card, and check authorization functions for merchants and financial institutions and offers corporate and government clients benefits transfer processing and electronic tax payment services. The firm also facilitates money transfers from the US and Europe, primarily targeting immigrants who send funds to their home countries. MasterCard (NYSE: MA) is a client. Western Union (NYSE: WU) is a competitor.

The firm had good news for investors late last month, when it announced fiscal Q3 EPS of 44 cents and revenues of $310.6 million. Wall Street has been expecting 42 cents and $300.9 million. In discussing the solid results, the CEO pointed to successful merchant services operations and strong revenue growth from an Asia-Pacific joint venture with HSBC Holdings (NYSE: HBC). Management also guided FY08 EPS to $1.95-$1.97 ($1.94 consensus) and FY08 revenues to $1.25-$1.26 billion ($1.24B consensus).

Western Union used to transmit telegrams like: Dear George, my office authorized a transfer of up to fifty thousand dollars to the Bailey Building & Loan STOP Then the advent of the telephone substantially reduced telegram traffic STOP

Next came the Internet and e-mail, which not only reduced telegram traffic to a crawl, it also decreased hard-copy letter writing, as the U.S. Postal Service will confirm.

Since that time The Western Union Company (NYSE: WU) has focused on its consumer money transfer service, or moneygrams, and the results have been impressive. Analysts expect 11-14% revenue growth in FY 2008 on higher transaction fees and foreign exchange fees.

The earnings crunch continues, and here are a few of the highlights of this past week's earnings coverage from BloggingStocks:

• Alcatel-Lucent (NYSE: ALU) posted its biggest quarterly loss since its creation in 2006.
• Archer Daniels Midland Co. (NYSE: ADM) missed earnings estimates despite revenue up 50%.
• Biogen Idec Inc. (NASDAQ: BIIB) fourth-quarter profit soared on strong sales of Avonex and Tysabri.
• Chevron Corp. (NYSE: CVX) reported record profits due to surging oil prices.
• CNET Networks Inc. (NASDAQ: CNET) revenue rose but the forecast was not encouraging.
• Data Domain Inc. (NASDAQ: DDUP) third-quarter revenues spiked due to aggressive overseas expansion.
• Elizabeth Arden Inc. (NASDAQ: RDEN) benefitted from overseas growth, which offset weak holiday sales.
• GlaxoSmithKline (NYSE: GSK) warned that 2008 earnings would be affected by competition from generics.
• Harris Corp. (NYSE: HRS) beat estimates and raised its guidance.
• Micros Systems (NASDAQ: MCRS) beat expectations and offered guidance in line with estimates.
• News Corp. (NYSE: NWS) fell short of earnings expectations despite strength in MySpace and Fox News.
• PepsiCo Inc. (NYSE: PEP) results met estimates and it announced further share buybacks.
• Polo Ralph Lauren Corp. (NYSE: RL) beat estimates and raised its guidance.
• SiRF Technology Holdings Inc. (NASDAQ: SIRF) missed expectations due to a seasonal decline.
• Toll Brothers Inc. (NYSE: TOL) expects to report its seventh straight quarterly revenue decline.
• Toyota Motor Corp. (NYSE: TM) attributed solid earnings to growth in China, Russia, emerging markets.
• Wendy's International Inc. (NYSE: WEN) missed earnings estimates, despite beating revenue forecast.
• Western Union Co. (NYSE: WU) posted results just ahead of Wall Street estimates.
• Yum! Brands (NYSE: YUM) posted solid results on overseas growth and share buybacks.

Do you know which company introduced the first consumer charge card? No? It also introduced the first successful stock ticker and was one of the original eleven stocks in the Dow Jones Average. Still no? What if I say that it completed the first transcontinental telegraph line across North America? Now you have it! Of course, the telegram is a memory.

Western Union Company (NYSE: WU) provides a range of money transfer and bill payment services worldwide. Its consumer-to-consumer operations involve multi-currency and real-time processing systems for walk-in, online, and telephone money transfers. Its consumer-to-business operations enable payments to utilities, auto finance companies, mortgage servicers, financial service providers, and governmental agencies. The firm also offers money order products and advance payment services. Western Union does business through a network of more than 320,000 locations, in over 200 countries and territories.

Investors were pleased last week, when the company reported Q3 EPS of 30 cents and revenues of $1.26 billion. The Street had been looking for 28 cents and $1.26 billion. D.A. Davidson subsequently upgraded the shares to "buy," noting improved business in Mexico and optimism over newer relationships with Wal-Mart Stores Inc. (NYSE: WMT) and Google Inc. (NASDAQ: GOOG). Management also guided FY07 EPS to $1.11-$1.13, versus consensus of $1.08. The share price popped on the news and then moved into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

If you use a credit card, the chances are pretty fair that you have done some business with an Atlanta outfit that facilitates electronic transactions around the world.

Global Payments (NYSE: GPN) is a high-volume payments processor of electronic transactions and related money transfers. It performs point-of-sale credit card, debit card and check authorization functions for merchants and financial institutions and offers corporate and government clients benefit transfer processing and electronic tax payment services. The firm also facilitates money transfers from the US and Europe, primarily targeting immigrants who send funds to their home countries. MasterCard (NYSE: MA) is a client. Western Union (NYSE: WU) is a competitor.

The firm had good news for investors last week, when it announced fiscal Q1 EPS of 54 cents and revenues of $311 million. Wall Street has been expecting 50 cents and $294.6 million. The company attributed the successful quarter to a solid increase in merchant service revenues, continued organic expansion and favorable results from an Asia-Pacific joint venture with HSBC. Management also guided FY08 EPS to $1.87-1.96 ($1.91 consensus) and FY08 revenues to $1.20-$1.25 billion ($1.19B consensus). Barrington Research subsequently reiterated its "outperform" on the shares.

While media pundits and politicians debate the pros and cons of immigration, one thing is clear -- the number of immigrants both in the U.S. and worldwide is growing rapidly. And, according to Nathan Slaughter, these workers are using money transfers to send funds back to their home countries.

In his Half-Priced Stocks newsletter, the advisor turns to Western Union (NYSE: WU) as a beneficiary of this trend. He considers the company a "venerable blue chip" that is significantly undervalued.

Slaughter notes, "With more than 300,000 agent locations worldwide, Western Union is clearly the dominant player in the money-transfer industry -- it boasts a network three times as large as its closest rival."

Meanwhile, Slaughter points out that the firm recently announced that it had joined with financial services firm Checksmart to offer its services in 263 locations. This new partnership, he points out, follows a flurry of recent deals that have seen Western Union pick up more than 1,400 locations in Mexico, Italy, and Spain.

Markets lost ground today closing about 1% lower as oil prices eased on higher investory numbers and higher bond yields. Darden Restaurants (NYSE: DRI) fell $3.41 (-7%) to $43.44 after reporting a fourth quarter loss.

Western Union (NYSE: WU) fell $1.24 (-6%) to $21.21. Home Depot (NYSE: HD) rose $1.76 (5%) to $40.03 on a sale of its supply business. Exxon Mobil Corporation (NYSE: XOM) fell $3.02 (-4%) to $82.82 as oil prices fell.

The NYSE had volume of 3.2 billion shares with 719 shares advancing while 2,565 declined for a loss of 121.44 points to close at 9,905.08. On the NASDAQ, 2 billion shares traded, 851 advanced and 2,186 declined for a loss of 26.8 to 2,599.96.

General Electric (NYSE: GE) saw heavy volume on the July 35 calls (GEGG) with over 95,000 options trading while the December 40 strike moved (GELH) with over 33,000 calls. General Motors (NYSE: GM) saw heavy volume on the September 35 calls (GMIG) with over 27,000 options trading. Kraft Foods (NYSE: KFT) saw volume on the July 37.50 calls (KFTGU) with over 24,000 options trading. Home Depot (NYSE: HD) saw heavy volume on the August 40 calls (HDHH) with over 22,000 options trading. In options there were 4.9 million puts and 5.4 million calls traded for a put/call open interest ratio of 0.91

Kevin Kersten is an Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.

Venerable money transfer firm Western Union Company (NYSE: WU) posted positive earnings overall on April 24, despite a 6% decline in volume for domestic transactions due primarily to the slowdown in the construction industry. Fewer jobs for Hispanics, who form the majority of construction workers, means fewer wire transfers of fewer dollars back home. Also, tighter documentation requirements for wiring money, coupled with increased immigration law enforcement caused a softening of domestic earnings by $20-$30 million. In order to counteract these effects, Western Union has reduced some fees for utilizing its online distribution network, www.westernunion.com.

Despite this, Western Union still posted solid revenue growth numbers. Revenue was up 8% to $1.1 billion. Diluted EPS was $0.25. First quarter 2007 operating income was $305 million. Net income was $193 million. During the quarter, Western Union was hit by higher than anticipated restructuring and integration costs as a result of spinning off its First Data subsidiary.

International consumer-to-consumer transactions now account for 60% of Western Union's total revenue. Within the international market, revenues from Chinese transactions are up 15% on transaction growth of 21%. India registered a 95% transaction growth rate from 1Q 2006. Western Union CEO Christina Gold believes Western Union has just scratched the surface of demand for wire transfers within India. In order to meet increasing international consumer-to-consumer demand, Western Union has signed more than 305,000 agent locations including supermarkets, newspaper kiosks and foreign banking networks worldwide.

In 1Q 2007, Western Union spent $113 million to buy back 5.2 million of its shares, with plans to spend an additional $867 million through 2008. Despite a tough domestic market, Western Union management forecasts FY 2007 to be $1.07-$1.11 on revenue growth of 10-11%. Western Union stock opened the year at $22.71, and closed recently at $22.16, having gone essentially nowhere. If you have the stock in your portfolio, I would hold on and wait for better times. If not, I wouldn't go out and buy it until we see how the US housing market will behave.

MOST NOTEWORTHY:

• JP Morgan upgraded EMC Corp (NYSE: EMC) to Overweight from Neutral as the firm believes improved momentum in the second-half of 2007 will drive shares higher.

• Network Appliance (NASDAQ: NTAP) was also upgraded by JP Morgan, to Overweight from Neutral, as the firm believes storage will experience improving secular trends this year.

• Citigroup upgraded ImClone (NASDAQ: IMCL) to Hold from Sell and raised their target to $40 from $26 due to lower competitive threats from Amgen Inc's (AMGN) Vectibix.

• Prudential raised International Game Technology's (NYSE: IGT) rating to Neutral from Underweight, citing valuation.

• Goldman Sachs upgraded DreamWorks Animation SKG, Inc (NYSE: : DWA) to Buy from Neutral with a $36 target and added DWA to their Americas Investment Buy List. Goldman believes the company's new films should drive a higher valuation.

• Wachovia upgraded Urban Outfitters, Inc (NASDAQ: URBN) to Outperform from Market Perform after a meeting with management as they believe a turnaround is well in progress.

• Wachovia upgraded Northrop Grumman Corp (NYSE: NOC) to Market Perform from Underperform on valuation.

• AG Edwards upgraded Western Union Co (NYSE: WU) to Buy from Hold with a $36 target.

• Friedman, Billings, Ramsey upgraded shares of Progressive Corp (NYSE: PGR) to Market Perform from Underperform on valuation.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Western Union (NYSE:WU ) is the favorite speculative idea for 2007 from Paul Tracy. The editor of StreetAuthority Market Advisor notes, "The company, which dates back to the early 1850s, has one of the most recognized names around the world. Today, Western Union is a financial powerhouse, generating some $4 billion in annual revenues.

"As the world's leading money transfer specialist, the firm operates a vast global network of 270,000 agent locations spread throughout nearly 200 countries. With more than a quarter of a million locations, Western Union's network dwarfs its closest rivals by a wide margin.

"In the digital age where the Internet is an increasingly popular transaction medium and ATMs are conveniently located at seemingly every major intersection, Western Union's core money transfer services may seem to be a bit dated. However, it is easy to forget that not everyone has a bank account or online access -- particularly in developing countries.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Western Union (NYSE: WU) is the top conservative pick for 2007 from Cory Janssen. In the Investopedia Advisor, he explains, "Spun off from First Data Corp. in October, Western Union is an outstanding company to own as a long-term holding.

"Its powerful brand recognition gives it a critical advantage in an industry where customer trust is of such high importance. As well, the company's enviable distribution network leaves it very well-positioned to capitalize on the ongoing growth in international money transfers.

"The business does face some short-term risks. Recent political debate surrounding U.S. immigration policy has prompted a decline in the frequency of money transfers from the U.S. to Mexico, and this has weighed on the company's recent quarterly numbers. We feel that this is a temporary blip.