Will DFC Global (DLLR) Disappoint This Earnings Season? - Analyst Blog


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DFC Global Corp. ( DLLR ) is set to report fiscal second-quarter 2014 (ending Dec 30, 2013) results on Jan 30, 2014. Last quarter, it posted a 23.8% positive surprise. Let's see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Regulatory activities, including regulatory advisory costs, legal opinions and analyses, and audit and regulatory compliance costs are expected to aggravate total expense, which has already been witnessing an escalation. The company expects to incur expenses in the range of $10.0 million to $15.0 million in fiscal 2014.

Due to new loan rollover limitations (three loan rollovers per customer), DFC Global tightened the lending-underwriting norms, which will again weigh on loan growth in the U.K.

Earnings Whispers?

Our proven model conclusively shows that DFC Global is likely to miss earnings this quarter. That is because we caution against stocks with a combination of a negative Earnings ESP (Expected Surprise Prediction) and a Zacks Rank #4 or 5.

Negative Zacks ESP :  That is because the Most Accurate estimate is at 15 cents while the Zacks Consensus Estimate is higher at 19 cents. That leads to a difference of -21.05%.

Zacks Rank : DFC Global carries a Zacks Rank #4 (Sell).  Stocks with a Zacks Rank #4 and #5 have a significantly higher chance of missing earnings.

DFC Global's combination of a Zacks Rank #4 and an Earnings ESP of -21.05% makes us apprehensive of an earnings miss by the company on Jan 30.

Stocks to Consider

Here are some companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Moody's Corporation ( MCO ), earnings ESP of +1.3% and a Zacks Rank #2 (Buy).

Main Street Capital Corporation ( MAIN ), earnings ESP of +1.85% and a Zacks Rank #2.

Hercules Technology Growth Capital, Inc .  ( HTGC ), earnings ESP of +9.68% and a Zacks Rank #3 (Hold).

DFC GLOBAL CORP (DLLR): Free Stock Analysis Report

HERCULES TECH (HTGC): Free Stock Analysis Report

MAIN STREET CAP (MAIN): Free Stock Analysis Report

MOODYS CORP (MCO): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
More Headlines for: DLLR , HTGC , MAIN , MCO

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