Encore Capital Beats EPS Est

Zacks

Encore Capital Group Inc. (ECPG) delivered operating earnings of 80 cents per share in the fourth quarter of 2012, surpassing the Zacks Consensus Estimate by a penny. Results were 19% ahead of 67 cents earned in the year-ago quarter

Including convertible notes non-cash interest and issuance cost amortization of 1 cent, net income was 79 cents per share, up nearly 18% year over year.

Quarterly Operational Update

Total revenue increased 23% year over year to $144 million in the fourth quarter. The upside was attributable to a 20% year-over-year increase in revenue from receivable portfolios in portfolio and net interest income. However, it was in line with the Zacks Consensus Estimate.

Gross collections from the portfolio purchasing and recovery business were $230.5 million, improving 24% year over year.

Operating expense escalated 24% year over year to $104 million.

Adjusted earnings before interest, tax, depreciation and amortization (:EBITDA) improved 28% year over year to $134.7 million.

Full Year Highlights

Encore Capital’s operating earnings came in at $3.05 per share, up 29% over 2011.

Including convertible notes non-cash interest and issuance cost amortization of 1 cent, net income was $3.04 per share, up nearly 29% year over year.

Total revenue increased 24% year over year to $556 million in 2012.

Financial Update

Encore Capital exited 2012 with cash and cash equivalents of $17.5 million, much higher than $8.0 million at 2011 end.

Debt at 2012-end jumped to $706 million from $389 million at 2011 end.

Net cash from operating activities in 2012 was $98.5 million, up 16% year over year.

Purchases of property and equipment increased to $6.3 million in 2012 from $5.6 million in 2011.

Performance of few consumer loans providers

Discover Financial Services (DFS) reported its fourth-quarter earnings of $1.07, lagging the Zacks Consensus Estimate by 6 cents and the year-ago earnings by 11 cents.

SLM Corporation (SLM) reported its fourth-quarter earnings of 55 cents per share, beating the Zacks Consensus Estimate by 2 cents and the year-ago earnings by 4 cents.

Capital One Financial Corp. (COF) reported its fourth-quarter earnings of $1.42 per share, lagging the Zacks Consensus Estimate by 20 cents and the year-ago earnings by 53 cents.

Zacks Rank

Encore Capital currently carries a Zacks Rank #2 (Buy).
 

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