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PRA Group's (PRAA) Q1 Earnings and Revenues Beat Estimates

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PRA Group Inc.’s (PRAA - Free Report) first-quarter 2018 earnings per share of 47 cents beat the Zacks Consensus Estimate of 36 cents by 30.5%. Moreover, the bottom line rose 23.6% from 38 cents in the year-ago quarter on the back of higher revenues.

PRA Group, Inc. Price, Consensus and EPS Surprise

PRA Group, Inc. Price, Consensus and EPS Surprise | PRA Group, Inc. Quote

 

The company’s reported net income plunged 54.4% year over year to 47 cents per share in the quarter under review.

PRA Group’s total revenues were $223 million, up 8% from the prior-year quarter. The top line also surpassed the Zacks Consensus Estimate by 9.8%.

Quarterly Operational Update

PRA Group’s net finance receivable revenues of $217.7 million increased 12% over the year-earlier quarter owing to yield improvements on certain pools in Europe Core and Americas Core. This upside was also fueled by record portfolio purchases in the Americas last year.

Fee income of $5 million dropped 45.9%, primarily due to the sale of two fee-based subsidiaries earlier this year.

Total operating expenses increased 10.6% year over year to $169.5 million. This deterioration was induced by expenditure for compensation, employee services and communication.

In the reported quarter, the company generated cash collections of $426.6 million, up 12% from the comparable period last year. This upside was driven by operational improvements, hiring, high amounts of portfolio purchase, increase in ERC (Estimated Remaining Collections) and net finance receivable revenues. However, the cash collection was partially offset by a decline in Brazil’s cash collections as well as U.S. legal cash collections.

Financial Update

As of Mar 31, 2018, the company had total assets worth $3.7 billion, inching up 0.5% from the year-end 2017 tally.

PRA Group exited the first quarter with a total equity of $1.1 billion, up 3.3% from Dec 31, 2017-level.

Cash and cash equivalents in the quarter under discussion were $101.4 million, down 15.8% from the level at year-end 2017.

In the first quarter, borrowings dipped 0.9% to $2.15 billion.

The company invested $168.3 million in new finance receivables in the first quarter, up 26% year over year.

Zacks Rank and Performance of Other Players

PRA Group has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other financial miscellaneous service providers, which have reported first-quarter earnings, the bottom line of Synchrony Financial (SYF - Free Report) and American Express Company (AXP - Free Report) beat the Zacks Consensus Estimate while that of MoneyGram International Inc. (MGI - Free Report) missed the consensus mark.

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