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Conn's 2Q misses Street view, hurt by card segment

THE WOODLANDS, Texas (AP) -- Conn's, which sells consumer electronics, appliances, furniture and mattresses, said its second-quarter net income jumped 65 percent, but results missed Wall Street expectations due to poor performance of its credit card segment.

Shares fell 13.6 percent in premarket trading on Thursday.

Net income for the three months ended July 31 rose to $19.2 million, or 52 cents per share. That compares with net income of $11.6 million, or 35 cents per share, last year. Analysts, on average, expected 60 cents per share, according to FactSet.

Revenue rose 30 percent to $270.7 million from $207.46 in the 2012 second quarter. Analysts expected revenue of $261.4 million.

Conn Inc.'s credit card operating income fell 59 percent to $7.5 million from $3.1 million, hurt by a rise in the number of late payments in June and July. That led the company to set aside $21.3 million to cover uncollected debt, a 77 percent jump over last year's provision.

"The performance of our credit segment for the second quarter was below our expectations due to short-term execution issues in our collection operations," said CEO Theodore Wright. "Corrective actions were taken and negative delinquency trends rapidly reversed."

The company said delinquencies were down 12 percent from their peak at the end of August and they expect more declines in coming months.

Conn's reaffirmed annual guidance of $2.50 to $2.65 per share. Analysts expect $2.66 per share.

Shares fell $8.31, or 12.5 percent, to $59.75 in premarket trading. The stock has traded between $21.50 and $69.32 over the past 52 weeks, and has more than doubled since the start of the year.