Although its equity has been evaporating lately, Western Union's (NYSE:WU) operations continued to make it rain last quarter. However, since lowering its 2008 forecasts and announcing the withdrawal of long-term earnings guidance, Western Union's shares have fallen dramatically.

Prepare for the worst
Like startled deer, investors ran for the hills upon learning that Western Union may not be able to predict the future after all. On its behalf, you could argue that management's decision to withdraw long-term guidance was a responsible, rational decision.

These are uncertain times, and negative earnings surprises have the potential to shake shareholder confidence more than temporary guidance removal. Still, those heavily invested in the company's stock are hurting. Now that guidance will be provided only on a year-to-year basis, it will be more difficult for analysts to quantify the stock's long-term risks.

Hope for the best
Management's revised estimates indicate that it will earn no less than $1.29 per share for the year, and that's 9% higher than 2007's figure. Additionally, because the mechanics behind its profit make the company the dominant force in its industry, Western Union's owners can still be optimistic.

The company has solid fundamentals: transparent financial statements, competent governance, and relatively predictable revenue streams. Investors with the discipline to buy and hold may still want to consider Western Union, but only after weighing their own risk tolerance. The recent sell-offs have the company trading under 12 times expected earnings per share.

The big picture
Global macroeconomic uncertainty could lead to erratic currency fluctuations and sales volume reductions that would hurt Western Union. In that respect, canceling long-term guidance might make sense for now.

Companies dabbling in the money transfer industry could be hit hard in a worst-case scenario. Competitors like Global Payment Networks (NYSE:GPN), Euronet Worldwide (NASDAQ:EEFT), and MoneyGram International (NYSE:MGI) would be among the first to exit the market if conditions sufficiently deteriorated.

What a Fool believes
Conversely, Western Union is a free cash flow-generating machine with a PEG ratio under 1, significant pricing power, and a global presence. It does almost five times as much business as MoneyGram International, its closest competitor.

Arguably, to a greater extent than its rivals, it is big enough to endure both macroeconomic and regulatory trauma, and this Fool believes that barring a permanent structural downward shift in demand for money transfer services, Western Union should dominate the industry through a recession, and into the next recovery.

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Chris Jones owns shares of Western Union, which is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy that promises never to cancel guidance.