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Alliance Data's Card Business Receivables Surge in November

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Alliance Data Systems Corporation recently reported an increase in average receivables in its Card Services segment for the month of November.

The Plano, TX-based company recorded average receivables of $15.21 billion for the month, up 21.9% year over year. For the 11-month period ended Nov 2016, average receivables increased 24.1% year over year to $13.9 billion.

Net charge-offs came in at $71.67 million for the reported month, while for the 11-month period ended Nov 2016, net charge-offs were $651.89 million.

As a percentage of average receivables, net charge-offs for the month and the 11-month period ended Nov 2016, was 5.7% and 5.1%, respectively. The company had reported 5% and 4.6%, respectively, in the prior-year period. Alliance Data maintains its full-year 2016 guidance of 5% principal loss rate.

In the release, the Zacks Rank #3 (Hold) financial transaction service provider stated that the net loss rate for the month is in line with the full-year guidance of $7.2 billion for total revenue and $16.90 for core earnings per share. This reflects year-over-year increase of 11% and 12%, respectively.

Notably, shares of Alliance Data gained 7.10%, significantly outpacing the Zacks categorized Financial Transaction Services industry’s decline of 0.5%, in the last 90 days. Solid improvement in the top line and the bottom line contributed to the outperformance. Strong segmental performance and improved EBITDA were particularly responsible for the upside. Moreover, a robust liquidity position backed by strong cash flow generation has enabled the company to invest in strategic initiatives, which in turn, accelerated its growth. Notably, the company has witnessed upward revision of its full-year estimates over the last 90 days.


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Alleghany Corporation deals with P&C reinsurance and insurance businesses in the U.S. and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.

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Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%.

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