Encore Capital Tops Earnings Est, Lags Revs - Analyst Blog
May 13 2013 - 3:29AM
Zacks
Encore Capital Group Inc. (ECPG), delivered
first quarter 2013 operating earnings of 86 cents per share which
exceeded the Zacks Consensus Estimate of 80 cents per share.
Results also improved 23% year over year from 70 cents in the first
quarter of 2012.
Including convertible notes non-cash interest and issuance cost
amortization of 3 cents, and acquisition related expenses of 3
cents, Encore Capital reported net income of 80 cents per share, up
81.8% year over year.
Quarterly Operational Update
Total revenue of Encore Capital increased 14.1% year over year to
$144.3 million in the first quarter. The upside was attributable to
an 11% increase in revenue from receivable portfolios in portfolio
purchasing and recovering business, net of allowance adjustments.
However, results lagged the Zacks Consensus Estimate of $150
million.
Gross collections from the portfolio purchasing and recovery
business were $270.2 million, up 17% year over year.
Total operating expenses of Encore Capital increased 15.8% year
over year to $105.9 million from $91.4 million in the year-ago
quarter. Higher salaries and employee benefits, cost of legal
collections and other operating expenses mainly led to increase in
expenses.
Adjusted earnings before interest, tax, depreciation and
amortization (EBITDA), increased 21% year over year to $174.5
million in the quarter under review.
Financial Update
Encore Capital exited the quarter with cash and cash equivalents of
$29.9 million, up 70.8% from $17.5 million at Dec 31, 2012.
Debt decreased 8.5% to $646 million at Mar 31, 2013 from $706
million at year end 2012. Consequently debt-to-capital ratio of
Encore Capital as of Mar 31, 2013 stood at 60.2%, representing an
improvement of 330 basis points from 63.5% at Dec 31, 2012.
Net cash from operating activities in the first quarter of 2013 was
$23.7 million, down 12.6% year over year.
Purchase of property and equipment increased to $2.3 million in the
first quarter of 2013 from $1.6 million in the year-ago period.
Other Company Releases
Discover Financial Services (DFS) reported
first-quarter 2013 earnings per share (EPS) of $1.33, surpassing
the Zacks Consensus Estimate of $1.12.
SLM Corp. (SLM) – commonly known as Sallie Mae –
reported its first-quarter 2013 core earnings of 61 cents per
share, slightly ahead of the Zacks Consensus Estimate of 59
cents.
Capital One Financial Corp.’s (COF) first-quarter
2013 operating earnings of $1.92 per share substantially surpassed
the Zacks Consensus Estimate of $1.63.
Zacks Rank
Encore Capital currently carries a Zacks Rank #2 (Buy).
CAPITAL ONE FIN (COF): Free Stock Analysis Report
DISCOVER FIN SV (DFS): Free Stock Analysis Report
ENCORE CAP GRP (ECPG): Free Stock Analysis Report
SLM CORP (SLM): Free Stock Analysis Report
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