Western Union Co., the world's biggest money-transfer business, tumbled as much as 13% after reporting a drop in third-quarter profit and plans to increase expenses tied to regulatory compliance.
Western Union plans to invest additional resources across the world in order to comply with new and existing regulations, Chief Executive Officer Hikmet Ersek said this week on a conference call with analysts. Operating profit isn't expected to increase next year as a result of these costs, he said.
"Based on all these new and evolving requirements, our ongoing discussions and agreements with regulators around the world and our own reviews, we now anticipate significant additional investment in 2014, including adding more resources and new technology," Ersek said.
Net income for the three months ended Sept. 30 fell 20 percent to $214.4 million, or 39 cents a share, from $269.5 million, or 45 cents, a year earlier, the Englewood, Colo.-based company said in a statement. The average estimate of 28 analysts surveyed by Bloomberg was 36 cents.
The stock fell $2.34 to $16.90 at 5:39 p.m. Oct. 29 in extended trading in New York after touching $16.66. The shares advanced 41 percent this year through the close of regular trading, outpacing the 18 percent advance for the Standard & Poor's 500 Information Technology Index.