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PRA Group (PRAA) Q3 Earnings & Revenues Miss Estimates
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PRA Group Inc.’s (PRAA - Free Report) third-quarter 2016 earnings per share of 68 cents missed the Zacks Consensus Estimate by 11.7%. The bottom line also declined 20% from the year-ago quarter due to lower revenues. Adjusted net income was $31.7 million, down 23.4% year over year.
PRA Group’s total revenue was $222 million, down 3% year over year. Revenues also missed the Zacks Consensus Estimate by 3.5%. The downside may be attributed to the weakness in two non-accrual portfolios in Italy. These portfolios affected cash collections of $6.1 million to principal amortization during this seasonally weak period.
Additionally, PRA Group’s revenues from finance receivables income fell 3% to $202 million. Fee income of $17.6 million was down 1.1%, while other revenues plunged roughly 50% to $1.7 million. Cash collections in the third quarter were $371.7 million, down 2.4% year over year.
Total operating expenses decreased 12% year over year to $154.4 million. This was mainly due to lower legal collection fees, communication costs and other operating expenses. Other operating expenses declined 75% year over year, thereby lowering overall expenses. However, adjusted operating expenses increased 7% year over year.
Financial Update
As of Sep 30, 2016, PRA Group had total assets worth $3.3 billion, up 9% from year-end 2015. The company exited the quarter with total equity of $988 million, up 17.6% from Dec 31, 2015.
As of Sep 30, 2016, cash and cash equivalents were $91.8 million, up 29.6% from year-end 2015. In the reported quarter, borrowings increased 5.8% to $1.8 billion.
Annualized return on average equity was 14.0% in the quarter under review.
Among the other insurers that have reported their third-quarter earnings so far, the bottom line at Progressive Corp.(PGR - Free Report) and The Travelers Companies Inc. (TRV - Free Report) beat their respective Zacks Consensus Estimate, while earnings of RLI Corp. (RLI - Free Report) missed the same.
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PRA Group (PRAA) Q3 Earnings & Revenues Miss Estimates
PRA Group Inc.’s (PRAA - Free Report) third-quarter 2016 earnings per share of 68 cents missed the Zacks Consensus Estimate by 11.7%. The bottom line also declined 20% from the year-ago quarter due to lower revenues. Adjusted net income was $31.7 million, down 23.4% year over year.
Operational Update
PRA Group’s total revenue was $222 million, down 3% year over year. Revenues also missed the Zacks Consensus Estimate by 3.5%. The downside may be attributed to the weakness in two non-accrual portfolios in Italy. These portfolios affected cash collections of $6.1 million to principal amortization during this seasonally weak period.
Additionally, PRA Group’s revenues from finance receivables income fell 3% to $202 million. Fee income of $17.6 million was down 1.1%, while other revenues plunged roughly 50% to $1.7 million. Cash collections in the third quarter were $371.7 million, down 2.4% year over year.
Total operating expenses decreased 12% year over year to $154.4 million. This was mainly due to lower legal collection fees, communication costs and other operating expenses. Other operating expenses declined 75% year over year, thereby lowering overall expenses. However, adjusted operating expenses increased 7% year over year.
Financial Update
As of Sep 30, 2016, PRA Group had total assets worth $3.3 billion, up 9% from year-end 2015. The company exited the quarter with total equity of $988 million, up 17.6% from Dec 31, 2015.
As of Sep 30, 2016, cash and cash equivalents were $91.8 million, up 29.6% from year-end 2015. In the reported quarter, borrowings increased 5.8% to $1.8 billion.
Annualized return on average equity was 14.0% in the quarter under review.
PRA GROUP INC Price, Consensus and EPS Surprise
PRA GROUP INC Price, Consensus and EPS Surprise | PRA GROUP INC Quote
Zacks Rank and Performance of Other Insurers
PRA Group currently holds a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among the other insurers that have reported their third-quarter earnings so far, the bottom line at Progressive Corp.(PGR - Free Report) and The Travelers Companies Inc. (TRV - Free Report) beat their respective Zacks Consensus Estimate, while earnings of RLI Corp. (RLI - Free Report) missed the same.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>