Markets

PRA Group (PRAA) Q3 Earnings Miss, Fall Y/Y on High Costs

PRA Group Inc . PRAA reported third-quarter 2015 earnings per share (EPS) of 99 cents that missed the Zacks Consensus Estimate of $1.17. The bottom line also declined from $1.11 per share in the year-ago quarter. The year-over-year deterioration came on higher expenses.

PRA Group Inc. (PRAA) - Earnings Surprise | FindTheCompany

PRA Group's total revenue in the reported quarter came in at $235.3 million. The top line decreased 1.6% from the year-ago figure on lower income recognized on finance receivables. Revenues also missed the Zacks Consensus Estimate of $262 million.

Cash collections rose 5% year over year to $392.1 million. America-Core's collections soared 11.9%, collections at Europe-Core surged a 31.4%. However, collections at America Insolvency plunged 25.9%.

Additionally, PRA Group's revenues from its finance receivables income came in at $208.2 million, down 7.2% from $224.3 million in the year-ago quarter. Fee income increased 39.6% to $17.8 million.

Operating expenses rose 3% year over year to $148.3 million. This was mainly due to higher compensation and employee services expenses, agency fees as well as rent and occupancy expenses.

The increase in expenses offset the rise in revenues, thereby resulting in contraction in operating income by 8.5% to $87 million. Operating margin contracted 300basis points to 37%.

Balance Sheet and Capital Structure

As of Sep 30, 2015, PRA Group's cash and cash equivalents increased to $69.1 million from $39.7 million as of Dec 31, 2014. The company had $393.2 million outstanding under its line of credit as of Sep 30, 2015, substantially lower than $513.8 million as of Sep 30, 2014.

As of Sep 30, 2015, PRA Group's total assets were worth $2.98 billion, up from $2.78 billion as of Dec 31, 2014. Shareholders' equity was $863.5 million, down from $902.2 million as of Dec 31, 2014.

Performance of Other Stocks

MasterCard Incorporated. MA reported third-quarter 2015 operating EPS of 91 cents, which beat the Zacks Consensus Estimate of 88 cents per share.

Total System Services Inc.'s TSS third-quarter 2015 operating EPS of 78 cents breezed past the Zacks Consensus Estimate by 37%

American Express Co. AXP or AmEx reported third-quarter 2015 operating EPS of $1.24, which missed the Zacks Consensus Estimate of $1.31.

Zacks Rank

PRA Group currently carries a Zacks Rank #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MASTERCARD INC (MA): Free Stock Analysis Report

AMER EXPRESS CO (AXP): Free Stock Analysis Report

TOTAL SYS SVC (TSS): Free Stock Analysis Report

PRA GROUP INC (PRAA): Free Stock Analysis Report

To read this article on Zacks.com click here.

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.


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

In This Story

PRAA AXP MA

Other Topics

Earnings Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More