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PRA Group's Q4 Earnings Beat Estimates on Portfolio Income Strength
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PRA Group, Inc. (PRAA - Free Report) reported fourth-quarter 2024 earnings per share of 47 cents, which surpassed the Zacks Consensus Estimate by 4.4%. A loss of 22 cents per share was incurred in the prior-year quarter.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Total revenues of $293.2 million advanced 32.4% year over year. The top line beat the consensus mark by 6%.
The quarterly results benefited on the back of strong cash collections and rising portfolio income. As a result, the quarter also witnessed a rebound in the company’s net income. However, the upside was partly offset by an elevated expense level resulting from increased legal costs and fees.
PRA Group’s cash collections improved 14.1% year over year to $468.1 million but fell short of the Zacks Consensus Estimate of $481.9 million. The metric gained from higher cash collections across the United States and Europe.
Portfolio income was $229.7 million, which advanced 18% year over year and beat the consensus mark of $228.4 million. Other revenues more than doubled year over year to $8.3 million, significantly higher than the consensus mark of $4.5 million.
Total operating expenses of $199.1 million escalated 13.2% year over year due to increased legal collection costs and fees.
PRAA recorded a net income of $22.8 million against the prior-year quarter’s loss of $5.9 million.
The company purchased nonperforming loan portfolios of $432.7 million, which climbed 51.9% year over year. The cash efficiency ratio was 58%. The estimated remaining collections amounted to $7.5 billion at the fourth-quarter end.
PRAA’s Financial Update (as of Dec. 31, 2024)
PRA Group exited the fourth quarter with cash and cash equivalents of $105.9 million, which declined 5.9% from the 2023-end level. It had $1 billion remaining under its credit facilities at the fourth-quarter end.
Total assets of $4.9 billion increased 9% from the figure at 2023-end.
Borrowings were $3.3 billion, up 14.1% from the figure as of Dec. 31, 2023.
Total equity of $1.2 billion slid 3.7% from the 2023-end level.
PRA Group’s Full Year Results
For 2024, total revenues were $1.1 billion, which soared 38.9% from the 2023 figure. Portfolio income rose 13.2% year over year to $857.2 million. Earnings per share of $1.79 compares favorably against an incurred loss of $2.13 in 2023.
PRAA’s 2025 Outlook
Management estimates portfolio investments of $1.2 billion for 2025. PRAA forecasts cash collections to witness high-single-digit growth as a result of strong portfolio purchases and benefits from cash-generating initiatives.
The cash efficiency ratio is projected to be more than 60% in 2025. The company expects a return on average tangible equity of around 12%.
Here are some other Finance sector players that have reported fourth-quarter results so far. The bottom-line results of Virtu Financial, Inc. (VIRT - Free Report) , Synchrony Financial (SYF - Free Report) and American Express Company (AXP - Free Report) beat the respective Zacks Consensus Estimate.
Virtu Financial reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.14, which outpaced the Zacks Consensus Estimate by 32.6%. The bottom line recorded a more than four-fold increase year over year. Adjusted net trading income improved more than 75% year over year to $457.7 million. It beat the consensus estimate by 14.7%. Revenues from commissions, net and technology services amounted to $140.5 million, rising 22.8% year over year. Interest and dividend income of $123.8 million fell from $154.7 million a year ago.
Adjusted EBITDA jumped to $283.5 million from $99 million a year ago. Adjusted EBITDA margin of 57.5% improved 2,400 bps year over year. In the Market Making segment, adjusted net trading income was $347.9 million in the fourth quarter, up 107.7% year over year. The segment’s revenues rose 67.5% year over year to $706.5 million. The Execution Services unit recorded an adjusted net trading income of $109.8 million, which grew 17.6% year over year. Total revenues of $136.7 million grew 28.3% year over year.
Synchrony Financial reported fourth-quarter 2024 adjusted EPS of $1.91, which beat the Zacks Consensus Estimate of $1.90. The bottom line also increased from $1.03 per share a year ago. Net interest income improved 2.7% year over year to $4.6 billion. Retailer share arrangements of Synchrony increased 4.7% year over year to $919 million. Total loan receivables of SYF grew 2% year over year to $104.7 billion.
Total deposits were $82.1 billion, which rose 1.1% year over year but missed our estimate of $82.5 billion. Provision for credit losses decreased 13.5% year over year to $1.6 billion due to a reserve release. The purchase volume of Synchrony declined 3% year over year to $48 billion in the fourth quarter. Interest and fees on loans of $5.5 billion improved 2.9% year over year. Net interest margin deteriorated nine bps year over year to 15.01%. New accounts of 5 million slipped 19% year over year.
American Express reported fourth-quarter 2024 EPS of $3.04, which beat the Zacks Consensus Estimate by a whisker. The bottom line climbed 16% year over year. Total revenues, net of interest expense, amounted to $17.2 billion, which also beat the consensus estimate by a whisker. The top line improved 8.7% year over year. Network volumes of $464 billion rose 7% year over year. Total interest income of $6.1 billion increased 9% year over year. Provision for credit losses declined 10% year over year to $1.3 billion.
The U.S. Consumer Services segment’s pre-tax income of $1.5 billion improved 5% year over year. Total revenues, net of interest expense, climbed 12% year over year to $8.3 billion. The Commercial Services segment recorded a pre-tax income of $814 million, which rose 22% year over year. Total revenues, net of interest expense, amounted to $4.1 billion, which grew 8% year over year. The International Card Services segment reported a pre-tax income of $34 million, which plunged 76% year over year.
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PRA Group's Q4 Earnings Beat Estimates on Portfolio Income Strength
PRA Group, Inc. (PRAA - Free Report) reported fourth-quarter 2024 earnings per share of 47 cents, which surpassed the Zacks Consensus Estimate by 4.4%. A loss of 22 cents per share was incurred in the prior-year quarter.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Total revenues of $293.2 million advanced 32.4% year over year. The top line beat the consensus mark by 6%.
The quarterly results benefited on the back of strong cash collections and rising portfolio income. As a result, the quarter also witnessed a rebound in the company’s net income. However, the upside was partly offset by an elevated expense level resulting from increased legal costs and fees.
PRA Group, Inc. Price, Consensus and EPS Surprise
PRA Group, Inc. price-consensus-eps-surprise-chart | PRA Group, Inc. Quote
PRA Group’s Quarterly Operational Update
PRA Group’s cash collections improved 14.1% year over year to $468.1 million but fell short of the Zacks Consensus Estimate of $481.9 million. The metric gained from higher cash collections across the United States and Europe.
Portfolio income was $229.7 million, which advanced 18% year over year and beat the consensus mark of $228.4 million. Other revenues more than doubled year over year to $8.3 million, significantly higher than the consensus mark of $4.5 million.
Total operating expenses of $199.1 million escalated 13.2% year over year due to increased legal collection costs and fees.
PRAA recorded a net income of $22.8 million against the prior-year quarter’s loss of $5.9 million.
The company purchased nonperforming loan portfolios of $432.7 million, which climbed 51.9% year over year. The cash efficiency ratio was 58%. The estimated remaining collections amounted to $7.5 billion at the fourth-quarter end.
PRAA’s Financial Update (as of Dec. 31, 2024)
PRA Group exited the fourth quarter with cash and cash equivalents of $105.9 million, which declined 5.9% from the 2023-end level. It had $1 billion remaining under its credit facilities at the fourth-quarter end.
Total assets of $4.9 billion increased 9% from the figure at 2023-end.
Borrowings were $3.3 billion, up 14.1% from the figure as of Dec. 31, 2023.
Total equity of $1.2 billion slid 3.7% from the 2023-end level.
PRA Group’s Full Year Results
For 2024, total revenues were $1.1 billion, which soared 38.9% from the 2023 figure. Portfolio income rose 13.2% year over year to $857.2 million. Earnings per share of $1.79 compares favorably against an incurred loss of $2.13 in 2023.
PRAA’s 2025 Outlook
Management estimates portfolio investments of $1.2 billion for 2025. PRAA forecasts cash collections to witness high-single-digit growth as a result of strong portfolio purchases and benefits from cash-generating initiatives.
The cash efficiency ratio is projected to be more than 60% in 2025. The company expects a return on average tangible equity of around 12%.
PRAA’s Zacks Rank
PRA Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Finance Sector Players
Here are some other Finance sector players that have reported fourth-quarter results so far. The bottom-line results of Virtu Financial, Inc. (VIRT - Free Report) , Synchrony Financial (SYF - Free Report) and American Express Company (AXP - Free Report) beat the respective Zacks Consensus Estimate.
Virtu Financial reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.14, which outpaced the Zacks Consensus Estimate by 32.6%. The bottom line recorded a more than four-fold increase year over year. Adjusted net trading income improved more than 75% year over year to $457.7 million. It beat the consensus estimate by 14.7%. Revenues from commissions, net and technology services amounted to $140.5 million, rising 22.8% year over year. Interest and dividend income of $123.8 million fell from $154.7 million a year ago.
Adjusted EBITDA jumped to $283.5 million from $99 million a year ago. Adjusted EBITDA margin of 57.5% improved 2,400 bps year over year. In the Market Making segment, adjusted net trading income was $347.9 million in the fourth quarter, up 107.7% year over year. The segment’s revenues rose 67.5% year over year to $706.5 million. The Execution Services unit recorded an adjusted net trading income of $109.8 million, which grew 17.6% year over year. Total revenues of $136.7 million grew 28.3% year over year.
Synchrony Financial reported fourth-quarter 2024 adjusted EPS of $1.91, which beat the Zacks Consensus Estimate of $1.90. The bottom line also increased from $1.03 per share a year ago. Net interest income improved 2.7% year over year to $4.6 billion. Retailer share arrangements of Synchrony increased 4.7% year over year to $919 million. Total loan receivables of SYF grew 2% year over year to $104.7 billion.
Total deposits were $82.1 billion, which rose 1.1% year over year but missed our estimate of $82.5 billion. Provision for credit losses decreased 13.5% year over year to $1.6 billion due to a reserve release. The purchase volume of Synchrony declined 3% year over year to $48 billion in the fourth quarter. Interest and fees on loans of $5.5 billion improved 2.9% year over year. Net interest margin deteriorated nine bps year over year to 15.01%. New accounts of 5 million slipped 19% year over year.
American Express reported fourth-quarter 2024 EPS of $3.04, which beat the Zacks Consensus Estimate by a whisker. The bottom line climbed 16% year over year. Total revenues, net of interest expense, amounted to $17.2 billion, which also beat the consensus estimate by a whisker. The top line improved 8.7% year over year. Network volumes of $464 billion rose 7% year over year. Total interest income of $6.1 billion increased 9% year over year. Provision for credit losses declined 10% year over year to $1.3 billion.
The U.S. Consumer Services segment’s pre-tax income of $1.5 billion improved 5% year over year. Total revenues, net of interest expense, climbed 12% year over year to $8.3 billion. The Commercial Services segment recorded a pre-tax income of $814 million, which rose 22% year over year. Total revenues, net of interest expense, amounted to $4.1 billion, which grew 8% year over year. The International Card Services segment reported a pre-tax income of $34 million, which plunged 76% year over year.