Encore Capital Group, Inc. (ECPG - Free Report) reported third-quarter 2016 adjusted net income of 14 cents per share, which missed the Zacks Consensus Estimate by 88.2%. Also, the bottom line deteriorated 88.8% year over year due to lower revenues.
Including one-time items, the company posted net loss of 6 cents per share, substantially narrower than the loss 52 cents in the prior-year quarter.
Third-Quarter Operational Update
Total revenue at Encore Capital plunged 35.7% year over year to $179.4 million. The year-over-year decrease can be attributed to a significant deterioration in revenues from receivable portfolios, net. Also, the top line missed the Zacks Consensus Estimate by 37.3%.
Gross collections declined 4% year over year to $407 million from $422 million in the prior-year quarter.
Total operating expenses of $201 million decreased 19% year over year. The decline in expenses was attributable to lower cost of legal collections, collection agency commissions as well as significantly lower general and administrative expenses in the quarter.
Encore Capital’s third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 7.2% year over year to $245 million.
As of Sep 30, 2016, total assets of Encore Capital was $3.7 billion, down 11.2% from the 2015-end level.
As of Sep 30, 2016, Encore Capital had cash and cash equivalents of $157.7 million, up 27.2% from year-end 2015.
As of Sep 30, 2016, investment in Receivable portfolio totaled $2.4 billion, down 1.2% from year-end 2015.
Total debt amounted to $2.8 billion, down 3.2% from the 2015-end level.
As of Sep 30, 2016, total shareholders’ equity was $577.7 million, up 3.1% from year-end 2015.
Encore Capital’s cash from operations jumped 34.5% year over year to $85.3 million in the first nine months of 2016.
Encore Capital carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Performance of Other Stocks
Among other players from the finance sector that have reported their 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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