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PRA Group's (PRAA) Q1 Earnings Miss Estimates, Decline Y/Y

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PRA Group Inc.’s (PRAA - Free Report) first-quarter 2019 earnings per share of 34 cents missed the Zacks Consensus Estimate by 5.6%. Moreover, the bottom line declined 27.7% year over year due to a rise in expenses.

The company’s total revenues were $246 million, up 10.3% from the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate by 3.8% on the back of higher finance receivables.

It witnessed cash collection of $461.2 million, 8% above the 2018's first-quarter level. This was driven by an increase in U.S. legal cash collections as well as a rise in U.S. call center and other cash collections.

Effective tax rate for the quarter under review was 18.6%.

PRA Group, Inc. Price, Consensus and EPS Surprise

Quarterly Operational Update

PRA Group’s fee income of $7 million increased 27.3% year over year.

The company’s finance receivables during the reported quarter grew 9% year over year to $238.8 million, primarily owing to Americas Core portfolio purchases made last year and the Europe Core portfolio purchases in fourth-quarter 2018.

Total operating expenses increased 12.6% year over year. This deterioration was due to higher legal collection costs and fees plus a rise in agency fees.

Financial Update

As of Mar 31, 2019, the company has total assets of $4.1 billion, up 5% from the level at 2018 end.

PRA Group exited the quarter with total equity of $1.1 billion, up 0.2 % from the level on Dec 31, 2018.

Cash and cash equivalents in the quarter under discussion were $102 million, up 3.5% from the figure as of 2018 end.

In the quarter under consideration, borrowings increased 4.6% 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 players from the finance sector having reported first-quarter earnings so far, the bottom-line numbers of Synchrony Financial (SYF - Free Report) , Discover Financial Services (DFS - Free Report) and Enova International, Inc. (ENVA - Free Report) beat the respective Zacks Consensus Estimate.

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